As the Czech Republic navigates its political future, the business interests of Andrej Babiš are onc again under the microscope. With Babiš eyeing another term as prime minister, questions arise about potential conflicts of interest stemming from his ownership stake in Agrofert, a large agricultural and chemical conglomerate.

David Kotora, director of the Czech branch of Transparency International, suggests that “ideally, Andrej babiš has to choose, either he will be a member of the government, his ambition is to be the prime minister again, or he has to sell Agrofert so that he is not in the conflict of interest.” Kotora also noted a less probable “third option” involving a notable overhaul of Agrofert’s business model,notably concerning its reliance on subsidies.

The Conflict of Interest Act in the Czech Republic aims to prevent public officials from benefiting personally from thier positions. It restricts companies with at least a 25% share held by a public official from accessing public contracts, subsidies, and investment incentives. The law also extends to media ownership.

Neither “Babiš nor his spokesman Martin Vodička” responded to inquiries about how the YES party chairman would address these conflict of interest concerns if he seeks a role in the next government. Agrofert’s subsidy revenue is ample; “during the reign of Andrej Babiš, ie between 2017 and 2021, he received over five billion crowns.”

Ladislav Mejzlík, Vice-Dean of the University of Economics, cautions that even divesting from Agrofert might not fully resolve the issue. “It depends on who Mr. Babiš would sell it. We all feel, and we do not have to be lawyers that if you give something to children or wife, you still have an impact on it and you are a beneficiary. And you still want the company to prosper,” Mejzlík stated.

Legal challenges Over Subsidies

“If the same person is involved in the management of the state and companies, it is indeed the definition of conflict of interest,”

Mejzlík suggests that business ownership should not automatically disqualify someone from political life. He proposes that a properly structured trust fund could offer a viable solution,provided it operates independently of Babiš’s influence.

“I would recommend that the trust fund should not be so eye -catching under Babiš’s control. So that the administrators should not be revoked. To truly pass the proceedings to someone else,” Mejzlík advised.

During his tenure as Prime Minister, “Babiš tried to avoid the conflict of interest in this way.” He placed his company in a trust fund, which his government argued was sufficient. However, a 2021 European Commission audit report concluded that “Babiš continued to dominate the agrofert Group and violated the laws on conflict of interest.”

The report stated, “They were purposefully built by simultaneously occurring as a founder and the only one, the person who has profit from the funds, and the advice of the Protectors consisted of, for example, lawyers from the Agrofert concern or his wife Monika Babišová.”

Constitutional lawyer Ondřej Preuss notes that “the courts interpret it so that even though Andrej Babiš had companies stored in the trust fund, he was still the controlling person. This did not avoid the obligations that arise from the act on Conflict of Interest.”

Agrofert Defends Its Practices

Recent legal challenges have further scrutinized Agrofert’s operations. Such as, the Moravian-Silesian Region lost a lawsuit against the Ministry for regional Development regarding a subsidy for a tractor supplied by Agrofert. Similarly, the Municipal Court in Prague ruled against Vodňany poultry in a subsidy dispute, and another verdict concerned Kostelecké sausages.

Agrofert spokesman Pavel Heřmanský stated, “We will not comment on individual procedural steps in this dispute. We are still convinced that we proceeded in accordance with the subsidy rules.”

Mejzlík argues that subsidies can blur the lines between private and state interests. “If the same person is involved in the management of the state and companies, it is the definition of conflict of interest,” he stressed.

“Babiš missed his original trust fund last december,” but has not resumed leadership of the group. “In the case of our success, of course, I will solve everything in accordance with the laws of the Czech Republic as it has always been,” Babiš affirmed.