Lauded by political leaders in North Macedonia, ammunition producer Shefshet Demirovski has twice been embroiled in espionage scandals in neighbouring Serbia, was bailed out by a man later charged with cocaine smuggling, yet enjoys a slice of the NATO arms market thanks to strong US and Turkish ties.
At roughly six o’clock on the morning of July 22, 2024, there was a knock at the door of a 36-year-old weapons engineer in Serbia.
Identified by Serbian authorities by the initials M.O., the man was in bed with his wife, sleeping. His two children were also asleep. His wife got up and opened the door. Police officers in balaclavas stormed inside, accompanied by Serbian security agents, and pinned M.O. to the floor.
The same night, two other weapons engineers, 64-year-old D.L. and 63-year-old D.M., were also arrested.
All three men had previously worked for the state-owned arms manufacturer Krusik. They were suspected of supplying confidential information on Krusik’s production of 120-mm mortar rounds to a company in neighbouring North Macedonia for which they had also done work – ATS Group, owned by Shefshet Demirovski.
It was not the first time Demirovski’s name had surfaced in a case of alleged industrial espionage in Serbia. In 2019, prosecutors accused him of bribing a former employee of Serbian ammunition producer Prvi Partizan to supply him with confidential specifications concerning production machinery.
The 2024 arrests underscored the intensity of competition between defence manufacturers in the Balkans, where Serbia boasts one of the biggest military industries, supplying battlefields across the world.
As global demand for arms and ammunition from the Balkans has increased, so too has the rivalry.
Enter Demirovski, about whom there is scarce publicly available information.
Backed by the state and boasting close ties with Turkey, the 50-year-old businessman has built one of North Macedonia’s most ambitious private defence manufacturers producing small-calibre ammunition.
“God, I wish we had more people like Sheki in this country,” a former government official told BIRN, referring to Demirovski by his nickname.
Demirovski’s alleged activities in Serbia, however, reveal a less savoury side to his success, as well as possible ties to the country’s criminal underworld.
Demirovski did not respond to questions sent to his official email address and
Shefshet Demirovski at the opening of ATS Inzenjering in 2019. Photo: Government of North Macedonia.
Belgrade arrest
Demirovski owns three factories in North Macedonia under the umbrella firm ATS Group.
He opened the first in Skopje in 2017, producing helmets, body armour and other personal protective equipment for soldiers and police officers; in 2019, he founded ATS Engineering, which manufactures machinery for ammunition production; and in 2020, he bought a Socialist-era ammunition factory in Samokov, a village in western North Macedonia, and turned it into ATS Ammunition.
Throughout that time, he has enjoyed the public backing of leaders from across the country’s political spectrum, as well as close ties with Turkey.
When he opened ATS Engineering in 2019, for example, then Prime Minister Zoran Zaev, from the Social Democrats, attended and thanked Demirovski for a donation of equipment to the police worth 50,000 euros; Zaev’s successor, Social Democrat Dimitar Kovacevski, visited the ATS Ammunition factory in Samokov in 2023; and in March last year, it was the turn of a VMRO DPMNE-led government to send ministers to the signing of aMemorandum of Cooperationbetween ATS and MKE, Turkey’s largest state-owned defence company, outlining plans to open a new gunpowder production plant.
Just two months after Zaev’s appearance at the opening of ATS Engineering in 2019, however, Demirovski was arrested in Serbia on suspicion of bribery.
According to Serbian media reports at the time, Demirovski met with a former engineer of Prvi Partizan at Belgrade’s Constantine the Great hotel and allegedly handed over 30,000 euros, with a promise of 30,000 more upon receipt of the information he wanted concerning production of 12.7 mm ammunition.
When the pair met again, this time at the Hilton, they were arrested.
Then Prime Minister Zoran Zaev and Shefshet Demirovski at the opening of ATS Inzenjering in 2019. Photo: Government of North Macedonia.
‘Aca the Florist’
In the end, prosecutors dropped the charges against Demirovski in 2022 in exchange for a fine of 250,000 euros. The deal was made on the basis of a rule allowing prosecutors to apply a fine instead of going to trial when the crime carries a punishment of less than five years behind bars. Given the sensitivity of the case, the bargain raised eyebrows.
ATS Group went on to produce its own 12.7 mm round.
Perhaps more worrying, however, is that according to case documents reviewed by BIRN, the 250,000-euro payment was made not by Demirovski, but by a Serbian national called Aleksandar Milojevic, better known as ‘Aca the Florist’ for his involvement in the flower trade.
In March of the following year, Milojevic was among nine people charged in connection with the smuggling of cocaine from South America to Europe; the indictees included Serbian and Montenegrin police officers and an agent of Serbia’s Security Intelligence Agency, BIA.
According to the indictment, seen by BIRN, Milojevic’s trucks were used to transport illicit cash from the Netherlands to Serbia, Montenegro and Croatia. He was accused of stashing some of the money at his Belgrade apartment. The address was the same as that listed under Milojevic’s name when he paid the 250,000 euros to have the charges against Demirovski dropped.
“These kinds of guys are always surfacing,” Serbian arms expert Aleksandar Radic said of Demirovski. He likened Demirovski to Serbian arms merchantSlobodan Tesic, who has enjoyed a long and lucrative relationship with the Serbian state despite being blacklisted by the United States and spending a decade on a United Nations sanctions list.
“It’s obvious he has solid support from powerful people,” Radic said of Demirovski.
North Macedonia’s Minister of Foreign Affairs and Foreign Trade Timco Mucunski and Defence
Minister Vlado Misajlovski with Turkey’s Deputy Minister of National Defence Musa Heybet at the signing of a memorandum of cooperation between ATS and MKE. The memorandum was signed by MKE General Manager Ilhami Keleş and ATS Group owner and CEO Shefshet Demirovski. Photo: Ministry of Foreign Affairs of North Macedonia.
Rivalling Serbia’s Prvi Partizan
Beside helmets, body armour and other personal protective equipment, Demirovski also produces small calibre, NATO-standard ammunition of 9 mm, 5.56 mm, 7.62 mm and 12.7 mm.
Defence industrying Serbia’s Prvi Partizan in terms of output
“Serbia wants to control the ammunition manufacturing business in the Balkans and therefore sees Demirovski as a threat,” said oneh Macedonia
Speaking on condition of anonymity, thecontext of Serbia seeking to maintain its dominance
Like the 2019 case, however, the case involving the three former Krusik employees over production of 120 mm mortar rounds remains in the investigation phase, a defence in an indictment. Demirovski was never charged. The three ex-employees have all denied wrongdoing. As yet, ATS does not produce 120 mm rounds
US, British board members
According to Demirovski, between 40 and 50 per cent of ATS production goes to the US, where ATS has a branch registered in St Louis, Missouri, in September 2022.
“We work for NATO countries that are very important to us and we constantly set ourselves apart from the competition with the best quality,” he said in a rare interview in November 2023. “The whole world already knows about us.”
Reflecting its focus on the US, ATS has contracts with two US lobbying firms – Mercury and Valcour LLC. The first is owned by former Republican Senator David Vitter and the latter by Matt Mowers, a former adviser to Donald Trump, the US president.
Prior to a visit to Washington in April this year by a delegation of the North Macedonia government,filingsunder the US Foreign Agents Registration Act, FARA, show that Mercury, on behalf of ATS, lobbied for a US-North Macedonia strategic partnership, the contents of which to some extent overlap with what was later agreed upon in the official discussion and with what Macedonian officials publicly stated. Several current officials denied coordinating with Demirovski, saying he acted on his own initiative.
The chairman of the Advisory Board at ATS Group is retired US Army General James L. Jones, formerly supreme commander of NATO and US forces in Europe and national security adviser under US President Barack Obama.
According toThe Washington Post, Jones is also a paid adviser of Saudi Arabia and Libya.
Retired US Army Lieutenant General Michael Barbero, who worked in counter terrorism in Iraq, also sits on the Advisory Board, as do John DeVito, a former employee of the Bureau of Alcohol, Tobacco, Firearms and Ammunition in New York, and John David Enright, who describes himself as having “over 30 years of experience collaborating with various branches of the US Military, DOD [Department of Defence] divisions, and agencies such as the CIA and DIA”.
Members of the ATS Group Advisory Board. Photo: ATS Group website.
From Britain, the board includes Sir Richard Barrons, a retired British Army officer who commanded the NATO Rapid Reaction Corps and the Joint Force Command of the British Army.
Conservative MP Mark Pritchard also served on the board and confirmed in early 2024 – in a statement to London-based media outletopenDemocracy– earning 900 euros per hour working for Demirovski, drawing criticism from the Labour Party given Demirovski’s involvement at the time in the bribery affair in Serbia. Pritchard is no longer listed as a member of the board on the ATS Group website.
Turkish ties
Demirovski is believed to owe his defence industry success to his ties to Turkey.
In 2008, reports in North Macedonia identified him as a representative of the Turkish company Yalcin, which tried and failed to buy a lead and zinc smelter in the central city of Veles.
Between 2021 and the end of 2024, his partner at ATS Engineering was Oktay Ercan, who has interests in Turkey’s defence sector and manufactured unmanned aerial vehicles in North Macedonia for both military and civilian use. Ercan also produced uniforms for the Sudanese army during the dictatorship of Omar al-Bashir, but left Sudan in 2019 following Bashir’s ousting amid accusations of corruption.
Besides having a Turkish wife, Demirovski also counts among his Turkish contacts the Bahadir family, with whom he built a solar farm in North Macedonia. Kovacevski attended the opening of that too in 2020. When the Social Democrats lost power, the conservative VMRO DPMNE party kept up relations with ATS Group, sending two ministers to the March 2025 signing of the MoC with Turkey’s MKE on a new gunpowder plant.
Milos Katic and Aleksandar Djordjevic also contributed reporting to this article.
Source: balkaninsight.com
