Prime Minister Benjamin Netanyahu had shares in at least one other company controlled by his cousin, Nathan Milikowsky, besides Seadrift, according to a law enforcement official. At this stage, the identity of the additional company or companies is unknown. Netanyahu declined to a request for details by TheMarker.
The official had recently been shown materials on the business ties between Milikowsky and Netanyahu by the Israeli prosecution, and says that Netanyahu held the shares indirectly, through a holding company owned by Milikowsky. The manner of the investment was similar to how the prime minister held shares in Seadrift, a Texas-based company making products for the steel industry. TheMarker has previously reported how Netanyahu obtained the Seadrift interest at a 95 percent discount.
In the years in which Netanyahu held shares in Seadrift, Milikowsky owned at least two other companies. It is not clear in which Netanyahu may have held shares, or if it was in another entity entirely.
In any case, one of these companies Milikowsky owned was C/G Electrodes of Pennsylvania, which produces graphite electrodes used in steel production. In 2010, Seadrift and C/G Electrodes merged into GrafTech International, a public company, one of whose major clients is the German company ThyssenKrupp.
ThyssenKrupp is the firm that sold submarines and ships to Israel in a deal that is the heart of the so-called Case 3000, aka the submarine affair.
According to a report by Huffington Post last week, C/G Electrodes was fined $250,000 for illegal trade with Libya during the time of the dictator Muammar Gadhafi. In 2007 and 2008, C/G Electrodes sold $8 million worth of Graphite to Libya, a breach of U.S. law intended to keep Gadhafi from developing nuclear weapons.
Also, Milikowsky and his brother Daniel co—owned a metals business called Jordan International, which was launched back in the 1940s by their father Mati Milikowsky. TheMarker has learned that Jordan International has independent commercial ties to Thyssenkrupp. According to internal correspondence in Thyssenkrupp, in 2017 at least one of the companies in the Jordan International group had business with Thyssenkrupp.
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The amounts of money documented are fairly small, and these deals themselves are not very significant in the context of the so-called submarine affair. However, the information shows a direct link between Milikowsky and Thyssenkrupp not through GrafTech, which could be significant when exploring the link between the shares affair and the submarine affair.
All the truth
Last week Channel 12 reported that State Comptroller Joseph Shapira sent a letter to Attorney General Avichai Mendelblit according to which Netanyahu conveyed reports to the State Comptroller’s Office that beg suspicion of criminal acts.
The letter compares all the reports Netanyahu filed with the state comptroller’s office in recent years, and highlights contradictions in various reports. The comptroller also highlighted what appears to be a pattern of partial reporting, concealing the full picture of the ties between Netanyahu and Milikowsky.
According to information that Netanyahu himself told the media, in 2007 he purchased 1.6 percent of the shares in Seadrift (indirectly: he bought shares in the family holding company NMSD) for $600,000. Three years later, just before Seadrift’s merger with GrafTech, Netanyahu sold his shares to his cousin for $4.3 million, earning more than 600 percent in a little over three years. His profit is especially remarkable considering that when Netanyahu sold his stake, Seadrift’s value had contracted by double-digit percentage points.
The explanation for the economic miracle is that Netanyahu apparently received a discount on his Seadrift stake. The deal valued the company at just $37.5 million, but less than a year later, other Seadrift shares were sold at a company valuation of $715 million. Thus, the prime minister allegedly received a discount of 95 percent on the shares, which is equivalent to a gift worth millions of dollars.
The shares deal is part of a series of wealth transfers from Milikowsky to Netanyahu and his family. This includes loans of hundreds of thousands of dollars to the premier, as well as a $200,000 loan to the prime minister’s daughter, Noa Roth, in 2010. Roth, Milikowsky and Netanyahu declined to say whether the loan had ever been repaid.
It is also known that for years, Milikowsky has been giving the prime minister thousands of dollars every time they meet. In 2016, Milikowsky also gave 38,000 shekels ($10,600) to Mida, a site keenly supportive of the prime minister. He also paid $300,000 for Netanyahu’s legal defense in pending criminal cases and said he would be willing to increase the amount to $1 million.