Delek sued for gas fraud [p. 16]

October 30, 2006 02:35
1 minute read.

Lawyers lodged a class action lawsuit for NIS 1.2 billion against the Delek fuel company on Sunday following recent revelations that several gas stations were allegedly diluting the fuel with foreign materials. Dr. Tzvi Tamir, Avner Ron and Omer Riterski submitted the suit on behalf of Shimshon and Shoshana Yishai, demanding payment for the alleged mixing of acetone and waste oils into the gasoline sold by "at least" 11 Delek fueling stations in Jerusalem over the past few years. While the litigants based their demand on a calculation of direct losses as represented by what they said was the average monthly revenue of NIS 1 million per gas station over seven years including interest, the lawyers noted that the materials mixed into the fuel also were known to cause damage to motors, had increased air pollution and hurt state revenues from the excise tax. Riterski said he saw the suit as part of the "struggle against the wider phenomenon of pirate fuel stations in the country and various acts of diluting fuel and derivative products." Separately, Delek subsidiary Delek Real Estate said it purchased a 45 percent stake in a Swiss yield-generating property company for NIS 500m. The deal will provide rental income for the next 17 years from three office buildings in Bern occupied by a Swiss government body. The unnamed Swiss company receives net rent of NIS 25.7m. annually from the government body under an agreement valid until the end of 2023. Bloomberg contributed to this report.

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