Powerful, Plugged-in, Predatory: Czech Arms Maker CSG Cashes in on West’s Rearmament

One figure has pulled ahead of the rest of the Czech Republic’s chasing wealthy pack. With a fortune of 470 billion crowns (over 19 billion euros), the 34-year-old owner and CEO of Czechoslovak Group (CSG), Michal Strnad, saw his wealth increase by 40 per cent in a single year, according to the rich list published by Euro.cz at the end of August. Only the energy magnate and global investor Daniel Kretinsky appears to be keeping up, coming in second with a fortune of 432 billion crowns. In third place was PPF heiress Renata Kellnerova with 385 billion crowns. It is, however, a highly volatile numbers game, with most of Strnad’s wealth tied up in his 85 per cent stake in CSG, Czechia’s leading arms manufacturer. And it’s been a chaotic, roller-coaster year for the defence group, with CSG shares losing about 60 per cent of their value between its record-breaking January IPO on the Amsterdam Stock Exchange and June, before recouping some of its losses since. CSG’s volatile stock is only one of several recent setbacks experienced by the conglomerate this past year, after facing allegations of industrial property theft, suspicions of inflating production capacity figures, and increased scrutiny over its ties to top political figures, especially in Slovakia and Czechia – all of course denied by CSG. BIRN spoke to several sources who’ve had dealings with the group and its top management, but prefer to remain anonymous in order to speak candidly. Michal Strnad (L), chairman of the board of directors and owner of CSG Group, looks on at Czech Defence Minister Jana Cernochova (R) on the opening day of the international defense and security technologies fair IDET, in Brno, Czech Republic, 28 May 2025. EPA/MARTIN DIVISEK A major European player After going public at the start of 2026, CSG could boast of having orchestrated the largest defence IPO in history and became the most valuable publicly listed company in Central Europe, surpassing Czech state-controlled utility CEZ and Polish oil giant Orlen. “CSG’s listing on the Amsterdam Stock Exchange represents a milestone not only for the company itself, but also for the Czech [defence] industry as a whole,” market analyst Jean-Paul van Oudheusden told Seznam Zpravy, echoing the industry-wide excitement that anticipated and followed the company’s 15 per cent stock offering. However, Vladimir Snidl, who has been covering CSG for years for the Slovak daily Dennik N, tells BIRN that “it’s not a black-and-white story.” He argues that while CSG “profits from very unfair types of public procurements”, the Prague-based group’s pro-Ukraine leanings as well as its economic, industrial and fiscal added-value in the countries where it operates – especially Czechia and Slovakia – paint a more complex picture of the arms maker. Founded in the 1990s by Jaroslav Strnad, Michal’s father, under the name Excalibur Army, a small company trading in discarded military equipment, CSG has grown in scope, positioning itself as a key ammunition supplier to Ukraine and NATO allies, riding the waves of European rearmament, and capitalising on the mounting sense of geopolitical doom. “They have truly built something that is probably unparalleled in the post-revolutionary history of the Czech Republic and Slovakia – a true arms empire that today rivals even the largest European giants in the industrial sector,” highlights Snidl. The group is now believed to be the world’s largest producer of small-calibre ammunition and Europe’s second top producer of medium- and large-calibre ammo after Germany’s Rheinmetall. It has about 40 production plants in nine countries (Czechia, Slovakia, Germany, Serbia, Italy, Spain, the UK, India and the US), employs 14,000 people, and saw its net profit increase by over 35 per cent in 2025, with preliminary 2026 results continuing in the double digits. “We see CSG, together with Rheinmetall, as the most dynamic growth story in the entire defence sector” for the 2025-2030 period, said Patria Finance analyst Michal Krikava. Emblematic of this optimism, barely a week goes by without CSG announcing new multi-million arms deals, armament joint-ventures and major acquisitions – either from the conglomerate itself or its majority owner: from acquiring a minority stake in historic Italian tire manufacturer Pirelli and a joint venture in Slovakia with France’s EURENCO for the production of gunpowder, to cooperation with Ukrainian Armor for the development of advanced defence tech or the construction of productions plants in Germany for nitrocellulose or nitro-glycerine. The US, too, has been a major source of expansion for the Prague-based conglomerate. This has especially been the case since the acquisition of Kinetic Group – whose assets include key actors like Remington Ammunition and Federal – which had long been blocked by the US Senate but eventually went through in 2024. “They’re very proud of their US expansion,” confirms journalist Snidl. In July, CSG established a US subsidiary in Michigan, with an office in Washington DC, and started construction of a large manufacturing plant in Iowa in direct cooperation with the US Army. The group was also awarded multi-million-dollar deals with the FBI (whose current director Kash Patel has reportedly worked as a consultant for CSG in the past) and other US law enforcement agencies. Czechoslovak Group (CSG) celebrates 30 years since its founding in Prague, Czech Republic, in October 2025. Source: CSG Facebook In the halls of power “CSG is an example of a company whose growth was supported by good relations with the authorities in the Czech Republic and Slovakia,” according to an analysis by the Warsaw-based Centre for Eastern Studies (OSW). Some might argue this is something of an understatement. In the two successor states of Czechoslovakia, CSG has CSG has accumulated substantial political capital and secured broad access to high political circles. The filling of high management posts with top executives from the international defence industry – including hires from Rheinmetall, BAE Systems, Raytheon, Lockheed Martin or Airbus – has also granted the Czech group a powerful network plugged deep into the Western intelligence and security community. It has also showed unerring ability to find backers at the highest levels of state throughout changes of leadership, from Jaroslav Strnad’s hobnobbing within the circle of former president Milos Zeman to his son Michal’s close ties with the Czech political right. Tense relations with former defence minister Jana Cernochova, for instance, were soon smoothed over as orders came pouring in. CSG was also to become one of the main beneficiaries of the Czech-led “ammo for Ukraine” initiative championed by former prime minister Petr Fiala and his national security advisor Tomas Pojar – a former consultant for CSG – among other top officials with links to CSG-owned companies. “The insufficient provision of information, along with the lack of transparency regarding some processes in the Czech Republic like the ammunition initiative, raises a number of questions about the formal and informal influence of these individuals,” Marek Chromy from Transparency International Czech Republic insisted. “Cernochova hated Strnad, but over time she understood that she had to balance Andrej Babis’s power network, and she joined forces with Strnad,” an anonymous Defence Ministry source told Seznam Zpravy. Indeed, Strnad Jnr has had for years notoriously bad relations with Babis, whose return as prime minister at the end of last year initially appeared to throw into doubt CSG’s continued clout with Czechia’s top political establishment. Insiders claim that ties between the two became strained two years ago when Strnad lost his bid to acquire Pardubice-based chemical company Synthesia – a producer of nitrocellulose – and the Mafra press group from Babis’s Agrofert conglomerate, which ultimately sold the companies to billionaire Karel Prazak instead. “If someone makes 30 billion [crowns] at the expense of Ukraine and the war, we don’t like it,” Babis said after winning the general election in October 2025, with his ruling ANO party vowing to scrap the Czech-led ammunition initiative, promising to review past defence deals, and threatening to impose a windfall tax on local arms manufacturers. But this appears to have been more campaign-bark than policy-bite, with none of these threats materialising, while pragmatism and business-friendly attitudes seem to have prevailed. “CSG has good relations with the Czech Defence Ministry,” Snidl tells BIRN, a portfolio now in the hands of a nominee from the far-right Freedom and Direct Democracy (SPD) party, whose chairman Tomio Okamura – also speaker of the lower house – sparked anger within his own ranks for a July meeting he held with Michal Strnad in the parliament building. Within a fortnight, the Defence Ministry had already announced two large armament orders – including one in cooperation with its Slovak counterpart to purchase Tatra trucks – set to directly benefit CSG-affiliated companies. “We do not comment on speculation regarding personal or political relationships,” CSG spokesman Andrej Cirtek responded to BIRN’s enquiries. “CSG maintains standard professional relations with governments, political representatives and public authorities in all countries where it operates, including the Czech Republic.” The Czech government’s decision to keep the ammunition flowing to Ukraine also benefitted from a little nudge from CSG’s friends in the US – which even appears to have taken Babis by surprise – where Strnad has invested considerable political and financial resources over the past years. “If Michal Strnad wants to, he will get to Mar-a-Lago before Babis,” a source familiar with the group’s investments in the US told Reporter.cz, referring to Donald Trump’s Florida club and resort. (L-R) Slovak Defence Minister Robert Kalinak, Czech Defence Minister Jaromir Zuna, Hungarian Defence Minister Romulusz Ruszin-Szendi, and Polish Defence Minister Wladyslaw Kosiniak-Kamysz attend a presser after the V4 Defence Ministers meeting at the Stefania Palace in Budapest, Hungary, 25 June 2026. EPA/BOGLARKA BODNAR Smoking guns The extent of CSG’s political connections has raised eyebrows and fuelled suspicions in some quarters about the group’s business practices. In Slovakia, where the group has been expanding since 2013, several deals between CSG and the Slovak Defence Ministry announced in late 2025 were mere framework agreements rather than actual orders, and regarded by some as a ploy to artificially hype up the group’s prospects before its IPO the following month. Investigative journalists also uncovered financial ties between Slovak Defence Minister Robert Kalinak and companies owned by Strnad. According to Snidl, the Dennik N reporter, CSG made a winning bet early on to foster close ties with the ruling Smer party of Prime Minister Robert Fico. “Defence Minister Kalinak has been acting as if he were a hidden shareholder in CSG,” Snidl claims. And just last week, Kalinak admitted that his company Kallan Consulting had done lobbying work for a CSG subsidiary in the UAE but denied any conflict of interest, claiming the cooperation and financial payments ceased when he became defence minister in late 2023. “We see no basis for connecting this commercial project in the UAE with contracts subsequently concluded between CSG companies and the Slovak Ministry of Defence,” dismisses CSG spokesman Cirtek. Snidl disagrees, insisting that “it’s an incredible conflict of interest, and we still don’t know the whole story”, adding that while it is, to some extent, a topic of scrutiny in Slovakia, “it would have been a much bigger scandal ten years ago.” Further controversies have emerged over the past several months, putting a dent in CSG’s success story narrative. Just days before the IPO launched, long-time minority shareholder Petr Kratochvil began exercising his right to sell his stake in key parts of the business – a process CSG did not mention in its prospectus for investors ahead of the IPO, before then “invisibly” adding it to its annual report in white text over a white background. Strnad has also been locked in a long-running dispute with a minority shareholder in Tatra Trucks, which is part of CSG. Denisa Materova claims the management of the historic Koprivnice-based manufacturer only acts in favour of its majority shareholder amid concerns that Strnad is seeking to take full control of the company. From an initial reputation as something of a “shy heir” to his father, “Michal Strnad is said to be even more predatory than his father,” says Snidl – a reputation sources familiar with the company’s dealings have also highlighted to BIRN. “[Strnad] has become such an omnivore, he simply devours whatever he sees,” Seznam Zpravy journalist Janek Kroupa assessed recently. This appetite, sources told BIRN on condition of anonymity, has led the Czech arms manufacturer to roll out what they have described as unusually aggressive business practices to expand its reach and consolidate its dominance. The most telling case perhaps relates to Czech aircraft engine manufacturer PBS which, after rejecting an offer by Strnad to be bought outright, has since accused former employees of leaking sensitive and strategic information to CSG about their technical know-how and industrial processes. “We respect the right of any company to protect its intellectual property,” says CSG spokesman Cirtek. “At the same time, this matter should be seen in the broader context of a competitive dispute between two companies operating in the same technological segment.” Yet in October 2025, the group founded a new subsidiary AviaNera focused on the production of drones and unmanned aerial vehicles to be headed up by PBS’s former CEO, Pavel Cechal. Pointing to the recent departure of “a handful of our former technicians and managers… under non-standard circumstances”, the current PBS chief executive, Petr Kadner, has questioned CSG’s ability to produce in such a short time “such sophisticated technology as aircraft engines without prior experience”. CSG, on the other hand, has rejected the accusations of intellectual property theft. “AviaNera develops its own technical solutions and has access to its own know-how and propulsion system designs through its R&D, investments, partnerships and acquisitions,” including through its acquisition of Serbian company MUST Solutions in 2025, according to CSG spokesman Cirtek. Source: CSG Facebook Shooting blanks Meanwhile, investors’ high hopes about CSG’s future profits were temporarily dampened by the release in May of a bombshell report by the investment and investigative firm Hunterbrook questioning the Czech company’s ammunition production capacities, fuelling doubts on whether stated figures were being inflated. Although CSG insists its annual manufacturing capacity could increase to 1.1 million rounds by the end of 2027, the group is keen to highlight it is diversifying beyond the production of artillery shells – an overreliance that experts have long identified as a weakness for the company, including in light of a potential ceasefire in Ukraine. “If the conflict in Ukraine calms down, it is a problem for CSG,” Tomas Cverna, an analyst at the brokerage firm XTB, told Seznam Zpravy. “Of course, the sales of ammunition – which currently generate some 60 per cent of revenues – could eventually record some drop,” Krzysztof Debiec, an analyst at the Centre for Eastern Studies tells BIRN. “CSG, which focuses on relatively unsophisticated military production, if it wants to establish its position, must invest in a more innovative military production, and it seems the company’s bosses are aware of that,” he says. From land systems and aerospace systems to unmanned tech, CSG’s recent buying spree across Europe and North America (for the most part) has positioned the Prague-based group across a variety of defence segments. “We are witnessing a renaissance in the defence sector,” assessed J&T Banka analyst Pavel Ryska. “One feature of this is the renewal of the ground forces and the strengthening of air defence, which plays into the hands of Central European arms manufacturers [like CSG] focused on these segments.” Michal Strnad’s fortune is, both on paper and in optics, intimately tied to CSG’s success at the heart of Europe’s rearmament drive. Yet undermining that is another rich list ranking, published just two weeks after Euro.cz’s and based on a slightly different methodology, which wrote down 120 billion crowns (about one-quarter) of his estimated wealth. Companies like CSG remain at the mercy of rapidly shifting geopolitical currents, governments as friendly today as they may prove fickle tomorrow, and intense public scrutiny over how they got to where they are today.