Michael Ganor, the state witness in the submarines affair received about €10.2 million from German company ThyssenKrupp. He asked that the payments be transferred to at least three different companies belonging to him in Israel, according to documents obtained by "Globes," ahead of today's annual press conference held by ThyssenKrupp.
The documents also show that most of the money transferred to Ganor were for acting as an intermediary in the procurement deal for the sixth submarine ordered by Israel from ThyssenKrupp in 2012. The German company was also supposed to pay him an additional €10 million for promoting construction of four battleships ordered by Israel to protect its offshore Mediterranean gas rigs. ThyssenKrupp froze the contract with Ganor after the investigation against him was begun, and stopped all money transfers to him.
The German company is convening its annual press conference today at its corporate headquarters in Essen so that ThyssenKrupp CEO Heinrich Hiesinger can present the company's annual financial statement for the past fiscal year. The main focus of attention for journalists will be ThyssenKrupp's possible merger with India's Tata Steel.
Regarding submarines built at the HDW shipyards in Kiel by ThyssenKrupp's TKMS (ThyssenKrupp Marine Systems) business solutions division, the indications seem to be that in the near future the German company will forego use of an Israeli representative and open its own representative office in Israel staffed by its own employees. The company is by no means certain that the deal for Israel to procure three more submarines, and which has been approved by a memorandum of understanding (MoU) between Israel and Germany last month, will actually go ahead. The doubt is due to a clause in the MoU requiring approval by Israel's Attorney General that the essence of the deal has not been tainted by corruption.
ThyssenKrupp has consistently tried to distance itself from the corruption affair surrounding the submarines and combat ships deal, which has been the focus of a police investigation and a wave of arrests on the matter in July. On July 23, Ganor signed a state-witness agreement, which imposes one year in prison on him and a NIS 10 million fine following his admission to paying bribes to senior Israeli military and public figures. As a result of the affair, a range of these senior figures have been arrested including former Israel Navy commander Eliezer Marom, former commander of the Israel Navy commando unit Shayetet 13 Shai Brosh, former chief of Prime Minister Benjamin Netanyahu's bureau David Sharan, former government minister Eliezer (Modi) Zandberg, media consultants Tzachi Lieber and Nati Mor, while Advs.David Shimron and Yitzhak Molco have been questioned under caution.
Ganor, who in the past has been involved in real estate development, began working as ThyssenKrupp's representative in 2009, after replacing his predecessor Shaike Bareket. The head of TKMS at the time Walter Freitag refused to cooperate with an internal investigation conducted by ThyssenKrupp after the affair hit the headlines in November 2016 and sources at the company told the German business daily "Handelsblatt" that the then Israel Navy Commander Eliezer Marom has pressured ThyssenKrupp to change Bareket.
The internal investigation by ThyssenKrupp, carried out with the aid of an external Geman law firm, found no suspicions of corruption on the part of the German company's employees but the investigators did not even speak to Ganor's representatives or with Freitag, who has since retired and lives in Switzerland, and has refused to speak with either the company's representatives or the media. However, the internal investigation did examine all money transfers to Ganor carried out between 2009 and November 2016, and which amounted to €10.2 million. The investigation also verified that the three payments were to companies in Israel belonging to Ganor. Ganor owns at least eight companies in Israel and apparently also owns an Austrian company called Hallmark Properties.
Adv. David Shimron, who denies Ganor's testimony, and was allegedly supposed to rake in 20% of the mediation fee, visited ThyssenKrupp's headquarters several times, among other things in order to discuss amendment to the type of fees that Ganor receives. He received no money directly from ThyssenKrupp.
As part of the conclusions drawn by ThyssenKrupp from the affair, after the company has seen its image tarnished, especially after CEO Hiesinger had declared a policy of "zero tolerance to corruption," is to stop working with representatives in Israel. Instead, TKMS will open its own representative office in Israel, operating on the same model as ThyssenKrupp's elevator business in Israel.
TKMS is the principle owner of HDW shipyards and German Naval Yards, which built the sixth submarine procured by Israel due for delivery in 2018, and the four combat naval vessels, due for delivery by 2021. Last month, the Israeli government and Germany signed an MoU for the procurement of three more submarines for €1.5 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on November 23, 2017
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