Swiss defence contractor wants fresh start after fraud probe

Ruag is turning the page following a wide-ranging investigation Keystone-SDA

Swiss defence contractor RUAG wants to turn the page on a dark chapter following a spate of serious irregularities dating back to 2002.

“The complexity of these projects made the work demanding. However, this investment was a deliberate choice to prepare for our future, and it has borne fruit,” said Jürg Rötheli, chair of Ruag MRO. “We have ensured transparency, learnt the necessary lessons and laid foundations for a fresh start with peace of mind.”

Rötheli acknowledged that some aspects have not yet been fully resolved or require further action. He said that the next steps are already being planned, with a focus on transparency.

The affair came to light in 2025 when the Swiss Federal Audit Office scrutinised the management and governance of Ruag MRO. The findings of fraud and poor stock management were damning.

RUAG had already launched an investigation in 2023 after identifying irregularities and unresolved issues. That investigation has now been completed. Investigations carried out by the law firm Niederer Kraft Frey have shed further light on other irregularities and potential offences.

There is therefore a suspicion that a former employee may have unlawfully transmitted sensitive technical drawings to private email addresses and to third parties in Germany.

There are also indications that a South African subsidiary of Nitrochemie (now in liquidation), in which RUAG holds a minority stake, may have been used to facilitate transactions that would not have been authorised from Switzerland or Germany.

Furthermore, the investigation indicates that, as part of the demerger of the RUAG Group, a stake was sold to an acquiring company in which a former RUAG employee had, in a personal capacity and without the required declaration, acquired a minority stake.

Further suspicions relate to possible falsification of original manufacturers’ certificates, as well as the alleged granting of benefits constituting a criminal offence.

Determined to take action

Comprehensive measures have been taken and are being continuously expanded. As part of a reorganisation, the Corporate Services unit was established and the compliance framework was strengthened.

Targeted improvements have been made, in particular, to export controls, the management of relationships with intermediaries in international business, and internal processes.

In addition to these structural improvements, Ruag has taken legal action. In Switzerland, criminal complaints alleging dishonest management, forgery of documents, breach of trade or business secrets and other offences have been filed and supplemented on several occasions, the defence contractor states.

At the same time, RUAG has brought civil claims totalling approximately €51 million against ten individuals. Criminal and civil proceedings remain pending.

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Translated from French, reviewed by an English Department journalist.