Federation of Bosnia Launches Comprehensive Audit of Defense Industry Companies

Sarajevo – A major financial and operational audit of the defense industry in the Federation of Bosnia and Herzegovina (FBiH) is now underway, marking the first sector-wide review in more than a decade. The move, initiated by the FBiH Government, seeks to establish a clear, fact-based understanding of how the country’s state-owned arms manufacturers have been operating — and where accountability lies.

Shareholder assemblies across several key firms have already begun approving the appointment of independent auditors who will conduct in-depth financial analyses for the years 2021 through 2024.
BNT-TMiH in Novi Travnik will decide on October 24, while Binas in Bugojno is scheduled for October 31. Similar sessions have already taken place at Pretis (Vogosca), Igman (Konjic), and TRZ Hadzici, signaling the start of what could become the most comprehensive examination of the sector in years.

“The time has come to look at every contract, every deal, and every management decision — without exemptions,” said Vedran Lakic, FBiH Minister of Energy, Mining and Industry. “Our goal is not punishment but clarity. Only when we know the real state of these companies can we build the next phase of growth on solid ground.”

The audit follows a decade of expansion for Bosnia’s defense manufacturers, many of which were revived from near-bankruptcy after the 2010s. Increased demand for ammunition and defense equipment in Europe boosted exports, employment, and revenues across the industry. However, recent internal issues — including mismanagement, inconsistent procurement practices, and poor financial discipline — have raised alarms inside the government.

While most companies reported steady performance in 2024, Igman Konjic, once a flagship exporter, recorded heavy losses estimated at more than 12.5 million BAM, prompting scrutiny of both past and current leadership.

Government sources told Adria Defense that the upcoming audits are expected to reveal systemic weaknesses in oversight and procurement procedures that persisted despite strong export figures.

“The defense industry is a strategic pillar of Bosnia’s economy,” Minister Lakic said. “But it must also be transparent, efficient, and accountable. This review is an investment in its credibility.”

Analysts view the move as a turning point — a test of whether the Federation can bring greater corporate discipline to one of its most important and politically entangled sectors.