German firm probing hiring of PM’s lawyer in sub deal

By
November 23, 2016 04:54

The US twisted the company’s arm to sever business ties with the Islamic Republic because of Tehran’s illicit nuclear weapons activity.

3 minute read.



INS Rahav submarine

Netanyahu at the INS Rahav submarine arrival ceremony. (photo credit:KOBI GIDEON/GPO)

German engineering giant ThyssenKrupp announced an internal investigation Tuesday into allegations that the company’s Israel representative, Miki Ganor, improperly subcontracted work related to Israel’s purchase of the company’s submarines to Prime Minister Benjamin Netanyahu’s lawyer David Shimron.

Attorney-General Avichai Mandelblit has rejected opening a criminal investigation into the submarine deal, and the Knesset is expected to vote on Wednesday against forming a parliamentary commission of inquiry. But ThyssenKrupp spokesman Tim Proll-Gerwe told The Jerusalem Post his company must probe the matter.

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“In Israel, ThyssenKrupp Marine Systems works exclusively with Mr. Ganor as sales partner,” Proll-Gerwe said.

“Our sales partners are contractually obligated to consult with ThyssenKrupp Marine Systems before engaging sub-contractors. This has not happened. Everything else we know only from the media and cannot comment accordingly. We do what we always do as part of our process, if we get indications of irregularities: We fully check and clarify the facts.”

Proll-Gerwe said there are “no signs of irregularities” but the company’s rule is to investigate all allegations, including from the media, whistleblowers and anonymous letters. He could not confirm if the company had questioned Ganor.

ThyssenKrupp requires its representatives to notify the company in advance of all subcontracting work, Proll- Gerwe said. He said if the investigation shows Ganor improperly outsourced the work to Shimron, it could lead to disciplinary measures. The range of penalties could result in a warning, the elimination of a bonus or termination of Ganor’s employment contract.

The spokesman said the company could also initiate legal action to seek compensation from an employee who violated the subcontracting policy.

There are categories of mitigating factors that could reduce any potential penalty.

Proll-Gerwe said one element would be if the employee “knowingly” engaged in funneling work to a third party.

The company is expected to address the allegations of graft and improper influence at a Thursday press conference at its headquarters in the German city of Essen.

Netanyahu released a statement Tuesday defending Shimron, saying that he has known him for many years and has found him to be “straight as a ruler” and “extra-careful to not violate the law.”

Zionist Union MK Erel Margalit mocked the statement, saying that Netanyahu should have known that his lawyer was representing a German company in a deal worth billions of shekels. He said Mandelblit had to investigate and find out the truth.

Earlier this week, Shimron underwent a polygraph test in which he was found to be telling the truth that he did not speak to the prime minister about submarines or his representation of Ganor. Shimron revealed that he made no money off the submarine deal but was paid a monthly retainer by Ganor of a few thousand dollars.

Channel 10 reported on Tuesday that after the Defense Ministry released an international tender for vessels to protect Israel’s gas fields in July 2014, the ministry’s legal adviser, Ahaz Ben-Ari, wrote then-Defense Ministry director-general Dan Harel complaining that Shimron tried to get the tender canceled and the tender given to ThyssenKrupp. Three months later, the tender was canceled after German Chancellor Angela Merkel gave Israel a discount.

ThyssenKrupp has been on the Israeli radar screen since the intensification of Iran sanctions.

The US twisted the company’s arm to sever business ties with the Islamic Republic because of Tehran’s illicit nuclear weapons activity.

Alexander Wilke, the head of ThyssenKrupp’s communication department, told the Post in 2010 that “4.5% of the shares of ThyssenKrupp are owned by the Iranians and that its business with Iran amounted to roughly 40 million euro in 2008/2009.”

Saeed Ghasseminejad, an adjunct professor of finance at Baruch College in New York, said he did not see any sign Iran sold the rest of its share in ThyssenKrupp.

“It does not mean that it did not happen, we are just unable to confirm it,” Ghasseminejad said. He said there are no Farsi media reports that show Iran sold its ownership share in ThyssenKrupp. If Iran’s stake exceeded 5%, there would be a legal notification. And if Iran’s ownership stocks dropped under 3% there would be notice. If the 4.5% remained steady, there would be no cause for a public legal notice.

When asked if ThyssenKrupp plans to conduct business with Iran, Proll-Gerwe said “after the lifting of relevant sanctions on ‘Implementation Day’ for ThyssenKrupp, ThyssenKrupp sees basic potential for all of our business sectors,” referencing the day the nuclear deal between Iran and Western powers took effect in January. “We are in discussions with many potential customers in Iran regarding concrete projects.”

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