CSG's €1.4 Billion Shareholder Claim Adds to Short-Seller Turmoil

Czech defence firm CSG battles dual crises: a €1.4 billion minority shareholder demand and a short-seller report, as stock hits near all-time low ahead of Q1 results.

The Czechoslovak Group is fighting a two-front war. Just days after a scathing short-seller report wiped more than a quarter off its market value, the Czech defence conglomerate now faces a €1.4 billion demand from a minority shareholder — and the stock is still bleeding.

Terzo Company, controlled by Petr Kratochvíl, has lodged the claim through an opt-out procedure, piling pressure on a company already reeling from allegations it misled investors during its January Amsterdam listing. CSG spokesman Andrej ?írtek dismissed the matter as a "standard commercial affair," insisting no binding valuation has been reached and that media figures remain speculative.

The dual crises have left the stock trading at €16.19, a staggering 37% decline over the past month and far below the €25 IPO price. The annualised volatility has surged past 85%, reflecting deep investor unease.

Management Fires Back on Multiple Fronts

CSG issued a detailed rebuttal on May 6, pushing back against Hunterbrook's claim that the company concealed a network of undisclosed insiders around its subsidiaries. The Prague-based group insists its business model and corporate governance were fully laid out in the IPO prospectus, calling the short-seller's portrayal "inaccurate."

The company also addressed a separate controversy head-on. An internal receivable of €275 million — stemming from the pre-sale of non-core assets including the Mobility, Healthcare, and Perazzi divisions — was fully settled in cash during the first quarter of 2026. Management framed the repayment as evidence that intra-group financial flows were conducted at arm's length, based on independent valuations.

Production Expansion and Leadership Stability

Reports of boardroom infighting have been firmly denied. Owner and supervisory board chairman Michal Strnad reaffirmed the group's international expansion strategy, pointing to a new production line in Slovakia that will add around 70,000 rounds of large-calibre ammunition annually from 2026.

The reassurance comes as European defence stocks broadly face headwinds, with investors fretting over industrial capacity constraints. CSG operates manufacturing sites across multiple countries, including Tatra Trucks in the Czech Republic, Slovakia's MSM Group, and The Kinetic Group in the United States.

Chart Damage and the Next Catalyst

Technically, the stock is barely clinging on. It sits just above its all-time low of €15.73, having blown through its 50-day moving average. Hunterbrook's affiliated hedge fund, which holds a short position, is directly benefiting from the rout.

All eyes now turn to May 20, when CSG releases its first-quarter results. Investors will scrutinise whether cash flows back up management's narrative — and whether NATO procurement orders can sustain the growth story that underpinned Europe's largest defence IPO. Until then, the company's rebuttal remains its only shield against a storm that shows no sign of abating.