Czech Military Lost Millions on Undelivered Drones from Bankrupt Firm
- A Czech defense company, Reactive Drone, is facing scrutiny following allegations of significant price gouging in drone sales to Ukraine.
- According to reports from November 24, 2025, Reactive Drone allegedly purchased drones for approximately 36 million Czech crowns (roughly $1.7 million USD) and subsequently sold them to the...
- The investigation also uncovered allegations of tax evasion.
A Czech defense company, Reactive Drone, is facing scrutiny following allegations of significant price gouging in drone sales to Ukraine. An investigation, launched by the National Centre for Combating Organised Crime, suggests the company resold Chinese-made drones at markups reaching up to 2,000% above their original purchase cost. The case highlights potential corruption within military procurement as Ukraine continues to receive substantial aid from Western nations.
According to reports from , Reactive Drone allegedly purchased drones for approximately 36 million Czech crowns (roughly $1.7 million USD) and subsequently sold them to the Ukrainian military for 692 million crowns (over $33 million USD) over a two-year period. This represents a substantial profit margin, raising concerns about exploitation during a time of conflict.
The investigation also uncovered allegations of tax evasion. Authorities believe the company transferred approximately 638 million crowns ($30 million USD) to bank accounts in China, potentially to avoid paying taxes in the Czech Republic. The company’s CEO, Konstantin Pilyaev, has been arrested, and the company’s accountant reportedly admitted involvement in the scheme. Authorities seized 384 million crowns ($18.3 million USD) in connection with the investigation.
This case unfolds against a broader backdrop of increased military spending in Ukraine. Ukraine reportedly spent close to one trillion hryvnias (approximately $23.62 billion USD) on weapons procurement this year, exceeding allocations for essential social services like pensions, policing, education, and healthcare. Planned domestic production of military equipment and ammunition is estimated at $12 billion, nearly double the output of Ukraine’s entire IT sector. Around $25 billion has flowed through Ukraine’s defense industry since the start of the full-scale invasion.
While Ukraine is rapidly expanding its domestic military production – now manufacturing millions of drones, hundreds of thousands of shells, and thousands of armored vehicles – challenges remain. Funding limitations hinder full production capacity, and Russia continues to invest heavily in counter-technologies. The increasing complexity of the industry itself also presents logistical hurdles.
The Reactive Drone case isn’t an isolated incident of procurement issues. A separate, earlier incident involved the Czech Ministry of Defence attempting to purchase unique drones for its military police. A contract for ten drones was awarded to a small Prague-based firm, Summit Defense, without a public tender process. However, the drones were never delivered, and the company subsequently declared insolvency. The Ministry of Defence estimates its losses at approximately 70 million Czech crowns, including an advance payment and contractual penalties.
The circumstances surrounding the Ministry of Defence’s contract with Summit Defense are particularly concerning. The company, owned by Doron Schulz, reportedly secured the contract due to claims of being the sole supplier capable of delivering the specific type of drone desired. The contract was signed in , and the drones were originally slated for delivery by mid-. However, the drones never materialized, and the Ministry was forced to terminate the contract in .
Further investigation revealed that a significant portion of the advance payment from the Czech Ministry of Defence was transferred to the United States for the purchase of the drones. However, the American supplier, Easy Aerial, reportedly refused to return the funds when the drones were not delivered. Schulz subsequently declared both Summit Defense and its parent company, Summit Advanced Systems, insolvent.
Tomás Pojar, a former Czech ambassador to Israel and advisor to the Prime Minister, was previously involved with Schulz’s companies as a director. Pojar maintains he was unaware of the drone contract with the Ministry of Defence, stating he had left the companies nearly two years prior to its signing. He also denies any lobbying efforts on behalf of the company. However, prior statements praising Schulz’s expertise in the field have come to light.
The Czech Ministry of Defence has stated that advance payments are standard practice in arms procurement, offering benefits such as earlier delivery and protection against currency fluctuations. However, in this case, the advance payment appears to have been made to a financially unstable company with limited assets, significantly reducing the likelihood of recovering the funds. The Ministry has indicated it will pursue legal avenues to recover its losses, but the prospects appear bleak.
These cases underscore the challenges of ensuring transparency and accountability in military procurement, particularly during times of conflict. The potential for corruption and exploitation necessitates rigorous oversight and due diligence to safeguard public funds and ensure that vital resources reach their intended recipients.