European defence giant entangled in NATO corruption scandal
Czechoslovak Group (CSG) recently celebrated the largest-ever initial public offering for a defence company. But it failed to disclose that one of its subsidiaries had been suspended by NATO as part of a major corruption investigation. Investors told Follow the Money that CSG should have made the information public before its listing in Amsterdam.
A major European defence company has been embroiled in a corruption scandal after NATO suspended one of its subsidiaries, Follow the Money and its media partners can reveal.
Czechoslovak Group (CSG) made headlines in January when it listed in Amsterdam, achieving the world’s largest-ever initial public offering for a defence firm.
However, the company failed to disclose that its Spanish subsidiary – Fábrica de Municiones de Granada (FMG) – had been blacklisted by the NATO Support and Procurement Agency (NSPA) last July.
The NSPA is at the heart of a major graft investigation, with current and former employees suspected of accepting bribes.
Kickbacks worth potentially millions of euros were allegedly paid by defence contractors or middlemen to land NSPA contracts to supply the military alliance and its 32 member states.
Internal documents obtained by Follow the Money, La Lettre, Le Soir, and Knack show that FMG – an ammunition manufacturer based in southern Spain – was temporarily barred from bidding for new contracts in July as part of the corruption probe.
When the suspension took effect, FMG held at least three NSPA contracts for tank artillery. The ban was originally meant to last four months, but has since been extended indefinitely.
Investors left in the dark
There was no mention of FMG’s suspension in the 728-page prospectus that CSG published days before it went public in January.
Under EU financial regulations, even the threat of a criminal investigation requires companies to inform investors if the information is considered of material importance.
The issue is whether the investigation and temporary suspension of FMG could be significant enough to influence investors’ decisions on buying CSG shares.
It’s not just the possible financial consequences that should be taken into account, but also the potential reputational damage, according to several experts in the field.
The Dutch shareholders association VEB said that investors “would have liked to have known in advance” about FMG’s suspension.
That view was echoed by two investors who spoke to Follow the Money on condition of anonymity due to the sensitivity of the matter.
In response to emailed questions, CSG spokesman Andrej Čírtek said that the suspension was “unfounded”.
Čírtek said that FMG had conducted a thorough forensic legal audit of all its dealings with the NSPA in recent years and “found no reason whatsoever to conclude there had been any irregularities or unlawful dealings”.
“To the best of FMG’s knowledge and based on the internal audit results, FMG believes it has done nothing wrong, committed no wrongdoing, or taken any part in any uncompliant activities, that could have led to said suspension,” he added.
Reputational risk
Founded in 2019, FMG has its roots in the centuries-old tradition of ammunition production in the southern Spanish city of Granada.
The company was taken over by the Slovakian MSM Group – part of CSG – in 2020.
FMG produces large-calibre shells for artillery and tanks – ammunition in high demand since Russia’s full-scale invasion of Ukraine in February 2022. As a result, its workforce has reportedly tripled in recent years. In 2024, FMG reported a turnover of €163 million and a profit of €22 million.
On 31 July 2025, the NSPA suspended FMG along with Israel’s largest defence company, Elbit Systems.
An internal letter by a senior NSPA manager – a copy of which was seen by Follow the Money – said there were “serious allegations indicating that it is likely the suppliers engaged in sanctionable practices, including irregularities in the award of contracts”.
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CSG told Follow the Money that its repeated inquiries to the NSPA about the suspension of FMG have gone unanswered, leaving the company to rely on media reports for information.
Despite the blacklisting, the Spanish firm can still sell directly to individual NATO member states. Those countries spend much more on defence than the NSPA itself.
“Given the current market situation, and the fact that the NSPA is only one of many FMG customers, the suspension has had no impact on the financial situation or business prospects of FMG [or its parent company CSG],” said Čírtek of CSG.
However, he said that CSG was concerned about the impact the suspension could have on its reputation.
Despite repeated requests, NATO and the Belgian Public Prosecutor’s Office – which is investigating the corruption case – have not commented on FMG’s blacklisting.
The findings follow last year’s investigation by Follow the Money and media partners, which uncovered the scale of the scandal.
It revealed how two US probes into the NSPA were abruptly and inexplicably dropped in July, raising concerns about political interference.
Separately, leaked documents exposed internal turmoil at the procurement agency, with senior officials having accused NSPA General Manager Stacy Cummings of favouritism, failing to investigate corruption, and unduly interfering in their work.