Court upholds publicity ban on one of the suspects in IAI bribery case

Lindestrauss points accusatory finger toward IAI CEO Moshe Keret for 2002 deal.

December 18, 2005 09:34
2 minute read.
comptroller lindenstrauss 298 88 aj

lindestrauss 298 88 aj. (photo credit: Ariel Jerozolimski)

The Tel Aviv Magistrate's Court on Sunday rejected a request by several newspapers and journalists to lift a court-ordered ban on publication of the name of one of the suspects in a police investigation into alleged bribery in Israel Aircraft Industries. The ban was imposed by Supreme Court Justice Miriam Na'or on September 29, in the context of a hearing where it was decided to release the suspect from jail, with limitations of movement, while the investigation continued. One of the best-known figures in the alleged bribery affair is IAI general-manager Moshe Keret, 71, who was due to retire in a few months. He is suspected of paying bribes during his 20-year tenure and of having committed breach of faith and fraud, including the transfer of millions of dollars to arms dealers and senior IAI officials as commissions for having won major contracts. In November, police ordered Keret to keep away from the IAI premises. Tel Aviv Magistrate's Court Judge Daniel Be'eri rejected the media request regarding one of Keret's alleged accomplices in the bribery affair, writing that there did not seem to be enough evidence to indict the suspect. "The picture that has emerged before me at this point is that there is substantial doubt that sufficient evidence to warrant an indictment against the suspect has been gathered," wrote Be'eri. The petitioners, including reporters Yossi Melman and Shosh Moula and the newspapers Globes, Ha'aretz and Yediot Aharonot, argued that "the IAI bribery affair is of prime importance to the public and therefore ought to be presented in such a way that the names of all those involved in the affair are disclosed." They also maintained that the suspect was "a central figure in the business and political world and has close ties with senior government figures." In another development connected to the IAI, State Comptroller Micha Lindenstrauss indicated that Keret should take personal responsibility for the fact that IAI subsidiary Elta Systems Inc. overpaid Koor Industries for the purchase of 30 percent of the shares of Elisra Electronic Systems Inc. Elta paid Koor Industries Inc. NIS 100 million for 30 percent of Elisra's shares plus an option to buy eight percent of the value of new stocks offered by the company up to December 12, 2003. The purchase price was calculated on the basis of an assessment that Elisra was worth NIS 330m. Elta purchased the stocks in November 2002. The state comptroller found that the estimate of Elisra's worth was based on profit projections made by the company itself. The IAI hired a financial consultant to assess Elisra's value. It made its assessment on the basis of Elisra's figures, but advised IAI to add a clause to the contract stating that the final price would depend on Elisra's performance in the coming years. IAI dropped the condition while negotiating the final contract with Koor. In the meantime, however, there were at least two developments before the final signing which made it clear that Elisra's projections would not come true and IAI should have realized that, wrote Lindenstrauss.

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