RUAG MRO: after internal irregularities, criminal complaints and damages of 51 million

RUAG MRO, the Swiss state-owned company active in the maintenance and trade of armament material, has closed the internal investigation opened in 2023 into irregularities in its own management. The report, published on Friday, describes a failure of internal control mechanisms and points to several possible offences. The company has filed criminal complaints and brought civil suits worth around 51 million euros against ten people.

The case had come fully to light in 2025, when the Swiss Federal Audit Office thoroughly examined the management and strategic direction of RUAG MRO. Four audits found serious dysfunctions and fraud linked to the sale of 96 Leopard 1 tanks. The most serious case concerns Leopard spare parts bought from the Dutch army for around 50 million francs and resold for 3 million to companies close to a former executive of the group.

Inquiries carried out by the law firm Niederer Kraft Frey brought further elements to light. There is a suspicion that a former employee illegally passed sensitive technical drawings to private email addresses and to third parties in Germany, allowing unapproved manufacturers to produce parts that may have ended up in RUAG warehouses or in Leopard 2 tanks. The federal government has already blocked the stocks concerned. Other evidence concerns a now-liquidated South African subsidiary of Nitrochemie, in which RUAG holds a minority stake, which is suspected of having enabled transactions not authorised by Switzerland and Germany, as well as an undeclared sub-stake acquired by a former employee as part of the group's split.

Public accountability in question

The report also criticises the oversight exercised by the federal government, as RUAG's owner, over the company. This is a public company, financed and guaranteed by taxpayers, in which internal and external controls should have detected the irregularities now revealed earlier. The chairman of the board, Jürg Rötheli, spoke of a necessary investment: "La complessità di questi dossier ha reso il lavoro impegnativo. Questo investimento era tuttavia voluto per preparare il nostro futuro, e ha dato i suoi frutti" ("The complexity of these files made the work demanding. This investment was nonetheless intended to prepare our future, and it has paid off"), he said, adding that the company had "posto così le basi per un nuovo inizio sereno" ("thus laid the foundations for a calm new start").

RUAG has launched a reorganisation, with a new Corporate Services unit and a strengthened compliance system, along with improvements to export controls and the management of intermediaries. Defence Minister Martin Pfister described the episodes as "inaccettabili" ("unacceptable"), stressing that they undermine public trust in a company that plays an important role in strengthening Switzerland's defence capacity. A working group from the Department of Defence will now assess the responsibilities of RUAG's bodies and the role of the federal government as owner, as well as the company's cooperation with the army, its main client. The results are expected within two to three months.

Whether the announced measures will be enough to prevent the public company from again generating losses of this scale at the expense of federal finances remains to be seen.