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Manhattan Astroturfing! Czech Apartment Bankruptcies! Carolina Court Drama! The Very Litigious Story of Pavol Krupa, Central Europe’s Most Interesting Activist.

The investor behind a ketchup protest is locked in a court battle with a stranger over an astroturfing campaign gone awry.

On a stifling early September day in 2018, dozens of protesters donned ketchup, mustard, and pickle costumes before parading down Third Avenue outside of Brazilian private-equity firm 3G Capital’s midtown Manhattan office.

Exactly 1,257 miles away, in Omaha, Nebraska, a similar scene unfolded outside of Berkshire Hathaway’s more pedestrian headquarters. There, protesters carried signs reading “Honk for Beans” and shouted catchy chants like “Stocks are down, we need to catch up, 3G Capital, clean the mess up.”

The protesters were there on behalf of Krupa Global Investments, a Czech activist investment firm run by Pavol Krupa that sent them out in hopes of convincing both Berkshire and 3G to join them in a crusade to shore up value in Kraft Heinz Co. 

Perhaps not shockingly, the condiments convinced neither investor to join Krupa’s efforts. And Krupa remains entirely undeterred. The firm has not limited its efforts to Kraft Heinz. Since then, it has set its sights on soccer team Manchester United, investment firm GAM Holding, and United Arab Emirates-based healthcare chain NMC Health, among others. 

The firm’s unconventional tactics, like that ketchup protest, can come across as weird. But one contest winding its way through a South Carolina courtroom — a case involving a man Krupa has never met and a socialist-era Czech apartment block — is perhaps the weirdest of them all.



Pavol Krupa was born in 1972 in Bratislava, Slovakia. In high school, he began a clothing sales business, to which he credits his start in the business community. “I've always had an enterprising spirit,” Krupa said via email. (Krupa declined to speak over the phone, as his “English isn’t excellent,” according to his spokeswoman.) “The important thing is to start selling, whatever it may be. That’s how you learn everything. The sooner you start working on something, the sooner you get the experience you need to succeed.”

Krupa grew up in a transitional period in Slovakia, which moved from communist rule to becoming a democratic republic in the late 1980s. Krupa, like many in his era and locale, embraced capitalism with zeal: In 2003, he founded Arca Capital, a Prague-based private-equity firm operating in the Czech and Slovak markets. The firm now manages more than €1 billion ($1.09 billion), according to its website — but Krupa is no longer involved.  

Krupa said he left Arca in 2018 because he wanted to focus solely on stock market investment and activist strategy. According to a court case filed against him, his application to manage the firm was rejected by the Czech National Bank on the grounds that Krupa is “insufficiently trustworthy.” (Krupa now runs his new, eponymous firm, which he founded in 2018 with his nephew, Juraj Krupa, out of a curved-glass building in Prague’s fourth district. “This is the business venture I find most fulfilling and most fun,” Krupa wrote of his work.)”

To hear Krupa tell it, his former firm is not in “any conflict whatsoever” with the Czech National Bank, but the bank “apparently had a different opinion in respect of some of my activities, which are guided by an activist strategy.” He said he wanted to focus solely on activist investing, which is why he founded Krupa Global. 

Krupa Global’s strategy is to target companies where the firm expects to see a yield potential of at least 50 percent, Krupa said. The firm considers valuations, fundamentals, management procedures, and the market’s mood, among other factors, to determine whether an investment is worth it, he added. 

“When making decisions, I also take into account my instinctive feelings,” Krupa said. “And these are usually borne out.” He noted that legendary activist investor Carl Icahn is his role model. 

Since the firm’s inception, Krupa Global has launched campaigns at firms like GAM Holding, where it’s calling for a strategic plan to stem asset outflows, and Manchester United, which the firm called “significantly undervalued.” Spokespeople for both firms declined to comment on Krupa's investment.

But what sets Krupa Global apart from its peers — both in Prague and stateside — is its willingness to try different approaches to convincing shareholders and target companies to change. 

Case in point: the Kraft Heinz protest. “Since this campaign was positively charged, witty, and with a detached point of view, it succeeded in capturing the necessary attention,” Krupa said of that protest. 

According to Rodolfo Araujo, head of the corporate governance and activism practice at FTI Consulting, activist investors like Krupa Global are getting more creative when it comes to communicating with fellow shareholders. He said he’s seen firms launch social media campaigns or create easy-to-understand videos to reach apathetic shareholders. 

But, he said, he had never seen some of the tactics Krupa Global has used, including staging protests. He said he would be worried that this could result in a negative perspective of the activist investor — in this case, Krupa — driving down share prices. 

“Something like this, people should take it very seriously,” Araujo said by phone. “It could damage their investment and the investment of the other shareholders.”

And according to a lawsuit filed against Krupa and a company called Crowds on Demand in the U.S. District Court for the District of South Carolina in September 2018, these sorts of tactics can have a far more sinister effect. 



The New York and Omaha protests, you see, were what is commonly referred to as astroturfing. The condiments weren’t organic, after all: They were brought there not by individuals’ fanaticism about good governance, but by Krupa.

The South Carolina lawsuit was brought by Zdenek Bakala, a Czech entrepreneur, investor, and philanthropist who has become the target of one of Krupa's many campaigns. 

Bakala, like Krupa, emphasizes a rags-to-riches story. According to the amended complaint filed in Bakala’s suit, after growing up under Czechoslovakia’s “authoritarian communist regime,” in the early 1980s he moved to California, where he worked as a dishwasher, learned English, and took community college classes. Bakala became a citizen in 1986 and graduated with an MBA from the Tuck School of Business at Dartmouth College — a veritable American dream achieved.   

Bakala worked as an investment banker stateside for several years before returning to what was now known as the Czech Republic, where in 1994 he founded the country’s first private bank, Patria Finance, the complaint said.

At issue in the lawsuit is a large Czech coal-mining company called OKD. A holdover from the country’s communist era, OKD was acquired in 2004 from the Czech government by a firm made up of the mines’ former managers called Karbon Invest, the complaint showed.  

Soon after, according to the amended complaint, Bakala, along with a group of investors, bought Karbon Invest. They took the company public in 2008 on the London, Prague, and Warsaw stock exchanges under the name New World Resources, which was the parent company of OKD, according to Krupa's response to the complaint. 

In addition to the coal-mining business, OKD also owned apartment buildings containing a total of 43,000 apartments in the Moravia Ostrava region of the Czech Republic.   

It was these apartments that sparked the feud between Bakala and Krupa. Krupa allegedly convinced some of the apartment tenants to allow him to sue Bakala on their behalf over a relatively esoteric rule buried in leasing agreements. 

That rule stated that if the apartment buildings were ever subdivided and the units sold individually, the tenants who already lived there would be able to buy them at lower rates. Under ownership of New World Resources, this didn’t happen, the court documents show. 

In 2015, New World Resources went bust after a slump in coal prices. This led to the splintering of the company’s assets, including those apartment blocks, according to the court documents. The result? The possibility of residents having the chance to buy their apartments vanished, thanks to contract provisions that didn’t carry over. 

Bakala has been blamed for the company going belly up, although he maintains it was the result of market conditions. But according to Krupa, the Czech Republic’s prime minister, Andrej Babis, said what Bakala allegedly did was “scandalous.” The country’s president, Milos Zeman, is also firmly on Krupa’s side, according to the amended response. In 2018, Zeman honored several people, including Krupa, who, according to the amended response, “fight against the so-called economic fuckers,” by giving them Medals of Merit. 

“If you ask ordinary Moravians and Silesians who their number one enemy the answer is: Billionaire Bakala,” Krupa’s amended response to Bakala’s complaint said. 

Krupa argues that because of Bakala and New World Resources’ bankruptcy, tenants were robbed of their opportunity to acquire the apartments. According to Bakala’s complaint, Krupa was allegedly seeking 50 percent of any recovery in those lawsuits, terms most tenants were not amenable to.

Some, however, agreed. And so a campaign against Bakala was born.



In Krupa's own words: “In the Czech Republic, my activist strategy may be seen, in a way, as being more aggressive.” 

Krupa and the splintered New World Resources companies have been locked in legal battles overseas for a few years now, according to Bakala’s complaint. 

But the feud between the two heated up in June 2017, when Bakala alleges that Krupa threatened to demonstrate in front of his Swiss home by bussing in protesters, including “notorious soccer hooligans.” While the so-called hooligans never showed up, Bakala alleges that because of this threat, his family was forced to briefly leave their home.

Krupa allegedly offered to end these threats of protest, as well as withdraw his overseas legal cases and cease investigating New World Resources, if Bakala paid him 500 million koruna ($21.9 million). The payment, according to Bakala’s suit, would allegedly be used to acquire shares of Krupa’s former firm, Arca Capital, which Bakala called “worthless” in the complaint.

“This is a case about extortion,” according to the complaint. 

When Bakala refused to pay up, the real campaign against him allegedly began. Bakala alleges that Krupa hired Crowds on Demand to stage protests and set up online campaigns targeting him and his companies. Crowds on Demand has been profiled on HBO’s Last Week Tonight, which detailed how it engages in astroturfing.

Soon after Krupa allegedly hired the company, StopBakala.org showed up online, and Bakala alleges that it can be traced to Crowds on Demand. The site no longer exists, but Bakala alleges that the site called him a “criminal” and accused him of bribing government officials to acquire OKD. That site was allegedly sent to many of Bakala’s connections, including Dartmouth, Bakala’s alma mater.

According to Bakala’s complaint, the business school’s dean allegedly received a “flood” of emails in August 2018, ostensibly from folks tied to Crowds on Demand, allegedly threatening to “defame Mr. Bakala and threaten protests at Dartmouth if the institution [did] not cut ties with Mr. Bakala.”

Bakala’s suit targeted both Krupa and Crowds on Demand for defamation, tortious interference, and violating the Racketeer Influenced and Corrupt Organizations Act. He sought actual damages of $75,000, attorney fees, and an injunction against the two companies. 

After a few months of involvement in the suit, Crowds on Demand broke with Krupa. This month, its founder, Adam Swart, worked with Bakala’s attorney, Marshall Winn, to settle the case against his company. 

“Swart and Crowds on Demand have agreed to provide us with all of their documents that relate to Krupa and to their involvement with Krupa,” Winn said by phone. While his law firm, Wyche, has not received those documents yet, it anticipates it will soon. What’s more is that Swart has agreed to provide testimony for Bakala’s case, Winn said. 

The settlement also involved the online publication of an apology to Bakala. 

Published on the aptly titled ApologytoBakala.com, Swart wrote: “Due to the fact that many of the underlying facts of the core issues of the campaign were written in Czech language publications, I relied on my briefings from Krupa Global Investments to form the basis of my understandings of the facts before engaging in the campaigns.” He added that he was not aware that Krupa Global had a financial incentive to collect money from Bakala. Swart did not respond to phone calls and emails seeking comment.

According to a translation of a statement Krupa provided to a Czech newspaper after learning about Swart’s apology: “I had nothing to do with these activities of Crowds on Demand and Mr. Swart. Any actions of Mr. Swart were of his [own] doing.”



Although Bakala has dropped his suit against Crowds on Demand, his beef with Krupa rages on. The two are more than willing to trade barbs via court documents and in interviews, calling each other names like “crook” or “liar.” But, curiously, they have never met in real life. 

Krupa says he’s never met Bakala, alleging that he only knows Bakala from “pictures, newspapers, media, and OKD-related disputes.” According to Bakala’s lawyer, Krupa has never appeared in the South Carolina court where the case is being administered.

“People wonder whether there’s a previous relationship between these parties,” Winn said. “There is none. [Bakala] has not known Krupa; he has never done business with him.”

According to Winn, the next step in the court case is for his team to receive the testimony from Crowds on Demand. From there, they will determine how to proceed with Krupa Global. 

The firm, meanwhile, continues to engage in activist investing. “Our role is the position of a watchdog which fights for shareholders’ rights,” according to Krupa.  

Although another ketchup-and-mustard protest hasn’t popped up on a busy Manhattan street, Krupa and his small staff continue to work overtime to promote his ever-growing list of activist stakes. In the first weeks of 2020 alone, Krupa has accused companies of being “scandalous,” being in “crisis,” and engaging in “market manipulation.” 

And just last week, Krupa launched another campaign against a fellow activist investor. The firm announced on February 7 that it is preparing to file complaints against Muddy Waters Capital with the U.K.’s Financial Conduct Authority and the FBI. 

The announcement claimed that Muddy Waters was providing “misleading and manipulative” information, which could harm shareholders. 

Muddy Waters’ response? “Muddy Waters Capital LLC wishes to respond formally to accusations publicly leveled against it today — by a fund nobody has ever heard of . . .  ‘Stupid is as stupid does.’”