TOPSHOT - German Chancellor Olaf Scholz (R) shakes hands with the prosthetic hand of a worker of the German med-tech company Ottobock during the opening of the Global Disability Summit in Berlin, on April 2, 2025. The third Global Disability Summit (GDS) is held from April 2 to April 3, 2025 in Berlin, Germany, hosted by the International Disability Aliance, the Government of Germany and the Government of Jordan. (Photo by John MACDOUGALL / AFP) (Photo by JOHN MACDOUGALL/AFP via Getty Images)
John Macdougall | Afp | Getty Images
Shares in German prosthetics firm Ottobock fell over 10% in Europe on Tuesday after a U.S.-based hedge fund made allegations about the conduct of its owner.
Hedge fund Grizzly Research announced a short position in Ottobock in its report on Tuesday, accusing the group's majority shareholder and chair of the board, Hans Georg Näder, of extracting funds from the company to fund a lavish lifestyle, as well as "actively supporting the Russian war propaganda effort by acting lenient regarding regulatorily required checks for military use of its products."
The publicly available report, released online, comes with a disclaimer that all statements contained within it are the opinions of Grizzly, not statements of fact, and its conclusions are based on "generally available information, field research, inferences and deductions".
CNBC could not independently verify the claims.
An Ottobock spokesperson told CNBC in a statement that, in light of its annual general meeting on Tuesday, it is "not in a position to provide detailed responses to the individual allegations at this time".
"That said, we categorically reject the statements and claims made in the report as well as the report's overall conclusion. We would be pleased to offer a more detailed discussion following the Annual General Meeting," the spokesperson added.
The hedge fund alleges that Näder has taken more money out of the company annually than it has earned for at least 15 years. It said it based this on media reports of his private consumption and cited a Wirtschaftswoche article that reported payments to Näder of €600 million, despite Ottobock only making €340 million in earnings after 2010 to 2022.
Ottobock floated on the Frankfurt Stock Exchange in October 2025 with a 3.8 billion euro ($4.42 billion) equity valuation and Näder remaining in control of 81% of its shares, having previously delayed its planned 2022 IPO due to financial market turbulence at the time.
The group's Frankfurt-listed stock was down 11% by around 5:20 p.m. local time on Tuesday, having fallen by over 20% since it went public.
Grizzly Research said Näder entered a payment-in-kind (PIK) loan of €1.1 billion in March 2024. Grizzly alleges that he used this to buy back 20% of Ottobock from Swedish private equity firm EQT before its IPO.
The analysts expect Ottobock to owe payment of about €2.36 billion when the loan is due in 2030, assuming the interest rate remains at a similar level, based on its own analysis.
"We think PIK loans are extremely aggressive loans with compounding interest that are... more often than not a deal with the devil," Grizzly CEO Siegfried Eggert told CNBC's "Squawk Box Europe" on Tuesday.
"When I realized the nature of the PIK loan, I felt convinced personally that this is an unsustainable situation that puts enormous risks on the minority shareholders," he added.
"The company is a lot more dependent on Russian business than it lets shareholders know," Eggert told CNBC.
He added that Grizzly estimates over 30% of Ottobock's net income is due to business in Russia, significantly higher than the most recent official figures, he told CNBC in Tuesday's interview.
The last available public data is Otterbock's IPO prospectus, which shows the firm generated 8.8% of its global revenue from Russia in the first half of 2025, up from 6.8% in 2024 and 5.0% in 2023.
Grizzly also cited a Business Insider article from 2025 that reported Ottobock's prosthetics were appearing in Russian media and propaganda channels for veteran care. Ottobock responded at the time that it only services Russian civilians.
"We think Ottobock trades higher Russian margins for brand degradation and risk of facing legal, financial, and regulatory penalties for effectively servicing the Russian military," Grizzly wrote in its report.
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