German Submarine Company Finds No Sign of Corruption in Israel Deal

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Israeli sailors stand on the new submarine Rahav upon its arrival in in Haifa, January 12, 2016.
Israeli sailors stand on the new submarine Rahav upon its arrival in in Haifa, January 12, 2016. Credit: Ariel Schalit, AP

German industrial group Thyssenkrupp has not found any evidence of corruption in its handling of a $2 billion contract to sell submarines and naval patrol craft to Israel, it said in a statement on Tuesday.

The 2016 deal has been under public scrutiny since it emerged that Prime Minister Benjamin Netanyahu's personal lawyer also represented the local agent of ThyssenKrupp Marine Systems, which was set to build the vessels.

Thyssenkrupp said its internal probe of the matter was over for now. It said it was limited by not being allowed to conduct its own investigation in Israel and not having the powers that prosecutors or police have.

"Based on the investigative measures we were able to carry out, we found no concrete indications of corruption – neither with regard to submarine projects, nor in connection with the procurement of corvettes," it said.

"However, these investigation results are explicitly provisional," it added.

Speaking to Haaretz, Thyssenkrupp said that they cannot comment on the possibility of withdrawing from the submarine deal if corruption is later discovered because the agreements are between the German and Israeli governments.

"At this time, Thessenkrupp is not the subject of Israeli or German investigations. However, it is important for us to get to the bottom of the matter," the company announced on Tuesday. "In our view, compliance is a key element of good corporate governance, and its meaning is broader than mere obedience to the law. For this reason we are closely monitor the events taking place in Israel."

The steel-to-elevators group declined to comment on Israeli media reports that the signing of the deal by Israel and Germany for the purchase of three submarines had been postponed in the wake of the ongoing corruption investigation in Israel.

Officials at both the German chancellery and defense ministry declined comment on the postponement. German government officials have previously declined to comment on the investigation and proceedings in Israel, describing it as an internal matter for Israel.

Last week, three suspects were remanded in custody and a fourth ordered held under house arrest after Israeli police questioned six public officials and private citizens on suspicion of corruption relating to the deal.

Thyssenkrupp has suspended its relationship with its agent for the deal, Miki Ganor, and is not currently the subject of German or Israeli investigations, it said.

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