Israel downplays Iran’s stake in company building its subs
Defense minister: No alternative to purchasing vessels from German shipbuilder ThyssenKrupp, Tehran’s role ‘negligible’
Defense Minister Avigdor Liberman shrugged off on Tuesday recent reports detailing the partial Iranian ownership of a German shipbuilder that has sold submarines and ships to the Israeli navy and has recently been the subject of controversy, saying that “the issue was already known.”
According to the reports Friday in Hebrew-language media, an Iranian government company holds a 4.5 percent stake in ThyssenKrupp and has earned nearly $100 million from its shares over the past decade, prompting a Knesset member to call for an investigation into Iranian involvement in the company.
Last month it emerged that Prime Minister Netanyahu’s personal lawyer worked as a representative of the company in Israel, in what may constitute a grave conflict of interest. Attorney General Avichai Mandelblit has ordered the police to look into allegations that David Shimron used his close relationship with the premier to push Israel to purchase several submarines from ThyssenKrupp, award the company a contract for naval vessels to defend Israel’s gas fields, and allow it to build a shipyard in Israel.
Channel 2 television said that the police inquiry — which is not yet a full-blown investigation — would focus not on the multi-billion-shekel purchase of three Dolphin submarines from the Germany company, which has dominated the headlines, but rather on a separate 2014 Defense Ministry tender for naval ships, also involving ThyssenKrupp, to protect Israel’s Mediterranean natural gas fields.
According to foreign reports, the Dolphin-class submarines afford Israel a nuclear second-strike capability crucial to the small country’s deterrence against potential nuclear aggressors. Over the last decade, Israel has repeatedly warned that Iran has been seeking to obtain nuclear weapons in order to destroy the Jewish state. It has also opposed the West’s deal to curb Iran’s atomic program in exchange for sanctions, arguing that it would add many billions to Iran’s coffers.
In a meeting of the Knesset Finance Committee, Liberman downplayed reports of the Iranian ownership, saying that coverage of the issue has been sensationalized.
“The facts and the reality are far from what is being portrayed,” Liberman said during a meeting of the Knesset Finance Committee, adding that “there was no other alternative” to purchasing the vessels from ThyssenKrupp.
He also said that while coverage of issue has framed it as a recent revelation, Iranian involvement in the company “was already known” prior to the signing of the recent submarine deal, which Liberman emphasized was negotiated before he became defense minister in June.
He also maintained that the deal was done in accordance “with the protocols of the cabinet and national security council” and that the size of Iran’s stake in ThyssenKrupp is “negligible.”
Liberman’s statement appeared to contradict a previous statement made by the Defense Ministry, which told the Hebrew-language newspaper Yedioth Ahronoth that it was unaware of Iranian involvement in the company.
According Yedioth Ahronoth, which broke the story on Friday, the Iranian investments in ThyssenKrupp began in the 1970s, during the era of the shah. Tehran invested some $400 million in the German company, giving it a 24.9% share that was inherited by the Islamic regime when it took over Iran in the 1979 revolution.
ThyssenKrupp Marine Systems, the current incarnation of the conglomerate, was created in 2005, when it acquired shipbuilding company Howaldtswerke-Deutsche Werft.
By the beginning of the new millennium, the Iranian investment in ThyssenKrupp, via the Iran Foreign Investments Company, was so significant that its deputy economy minister, Mohamad-Mehdi Navab-Motlagh, sat on the company’s board. But according to a Financial Times report in 2004, the German company “bowed to US pressure” and removed him from the board. At around the same time, the report said, “ThyssenKrupp was forced to pay a vastly over-inflated sum to the Iran Foreign Investment Company to reduce its holding to below 5 percent.”
In its report, Yedioth Ahronoth quoted a 2016 interview by Dr. Farhad Zargari, the current managing director of the Iran Foreign Investments Company, in which he confirms the investment in ThyssenKrupp.
“We own shares in important companies such as British Petroleum, ThyssenKrupp, Siemens, Adidas, and many other big brands,” Zargari told the Business Year website, which describes itself as a “leading research firm and publisher of annual economic resources on national economies.”
The Times of Israel Community.