Bill piles up for Swiss defence contractor fraud probe

Juerg Roetheli, chair of Swiss defence company Ruag Keystone / Peter Schneider

The costs of an investigation into Swiss state-owned defense company Ruag over dubious tank have reached a "double-digit million sum", according to the company’s chair.

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In February, new reports from the Federal Audit Office revealed the extent of irregularities at RUAG in which alleged cases of fraud spanned a ten-year period. A former senior employee is accused of pilfering money. Furthermore, 2,500 spare parts for tanks belonging to the army disappeared from a Ruag warehouse.

Due to suspected fraud surrounding the purchase of 100 Leopard 1 tanks in Italy, the Ruag Board of Directors commissioned an external investigation to the law firm Niederer Kraft Frey in August 2023.

Now, Ruag chair Jürg Rötheli has confirmed the cost of the ongoing two-year investigation to Swiss public broadcaster SRF. “But we have to put that into perspective with the amount of damage, which is also very high,” he said.

According to research by SRF, the damage to Ruag from the fraud cases amounts to at least CHF60 million. Rötheli declined to confirm this alleged sum, nor did he disclose the exact cost of the external investigation. However, the report by the law firm Niederer Kraft Frey cost less than CHF20 million.

Rötheli admits that this report is very expensive: “It is actually a very high amount and is of course painful for Ruag because we have to pay for it out of our own pocket.”

Several parliamentarians reacted with surprise and, in some cases, anger at the extraordinarily high costs of this external report.

Ruag had hoped to complete the external investigation this summer. However, the experts have apparently discovered further irregularities. “New elements of the case have come to light that now require further forensic investigation. Therefore, the investigation is taking longer than expected,” said Rötheli.

However, he added that the investigation should be largely completed by the end of the year. He hopes that this investigation will also help to recover embezzled funds.

Adapted from German with DeepL/mga

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