Teva CEO Eli Hurvitz Convicted of Tax Fraud Offences; Trading in Teva Shares Halted

Convicted together with Hurvitz in the Promedico case were businessmen Benjamin Jesselson and Alexander Eisenberg. Said the judge: "The accused broke the law for years, to the extent of many millions of dollars".

Jerusalem District Court Justice Ayala Procaccia today convicted Teva CEO Eli Hurvitz, as well as Benjamin Jesselson, Alex Eisenberg and Promedico, of offences under the Income Tax Ordinance, in the Promedico pharmaceuticals company affair.

After the court verdict was announced, trading in Teva shares was halted on the Tel Aviv Stock Exchange, and trading was also been halted on NASDAQ. It resumed shortly before noon on slight declines.

Hurvitz was convicted of offences of fraud under the Income Tax Ordinance, Jesselson of offences of income concealment, Eisenberg of offices of fraud and income concealment, and Promedico too, was convicted on both counts. The accused were cleared on counts of false bookkeeping and also of falsifying corporate documents.

"Through misrepresentation, commissions amounting to more than $12 million were enabled to flow to Vaduz, without any Israeli income tax being paid, thus preventing the payment of tax on revenues that were the fruit of business activity in Israel, generated in Israel and geographically located in Israel", Procaccia says in her judgement.

"Promedico’s acts of omission in the initial period were committed with the connivance of Eli Hurvitz, using fraudulent means to build up an external structure not conforming to the true business reality", the verdict reads.

Hurvitz commented: "I am stunned, surprised, I will continue to fight by all legal means. This is an incorrect verdict, and I am surprised and upset". Hurvitz’s defending counsel Adv. Ram Caspi said he was "very surprised". He said he would read the entire verdict and would then decide what steps to take.

Published by Israel's Business Arena December 15, 1998

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