The bribery investigation involving the Netanyahu municipality, in which Mayor Miriam Feirberg was arrested on suspicion of taking bribes from real estate developers, is branching out. In the framework of the investigation by Israel Police National Fraud Unit Lahav 433 in conjunction with the economic department in the State Prosecutor's Office, senior figures and officeholders in public companies were questioned over the past month on suspicion of giving bribes.
Those questioned include Avraham (Rami) Nussbaum, chairman and co-controlling shareholder in Ashtrom Properties Ltd. (TASE:ASPR), one of Israel's leading and most experienced construction and infrastructure companies. Nussbaum was released after being questioned.
Also questioned were Bonei Hatichon Civil Engineering and Infrastructures Ltd. (TASE:BOTI) chairman and CEO Amram (Ami) Peretz; Shmuel Antzel, former CEO of Delek Israel Fuel, a subsidiary of Delek Group Ltd. (TASE: DLEKG); and Paz Oil Company Ltd. (TASE:PZOL) CEO Yona Fogel. Four officeholders in private companies were also questioned.
The police said, "All those questioned were released on their own recognizance under restrictive conditions, including being barred from traveling abroad for three months, from going to the Netanya municipality for 15 days, and contacting any of the other parties involved in the affair."
Others involved in the case say that the questioning of senior figures in public companies took place in the framework of a further round of questioning in the course of completing the investigation in the Netanya municipality affair and sending the case to the State Prosecutor's Office for a decision.
Despite the fact that all of the officeholders questioned in recent days occupy important positions in public companies, or formerly did so, the only company to report the questioning of its officeholder was Ashtrom (Nussbaum). According to procedure, the police must give the information about investigations in public companies to the Israel Securities Authority, which is responsible for assessing and verifying that the companies report any events of significance to the company. The Securities Authority is in touch with the companies whose officeholders were questioned. As far as is known, some of the reports were delayed because the questioning of senior figures in some of the companies had not yet been completed.
The police added, "Due to the fact that public companies listed on the stock exchange are involved, Israel Police is informing the Securities Authority, as required."
As far as is known, those questioned (each separately and in connection with a different project) were questioned on suspicion of involvement in bribery offenses attributed to Feirberg. According to the information leaked to date, the police questioned Fogel on suspicion that he, or other parties in Paz Oil on his behalf or with his knowledge, paid a bribe to Shimon Sher, Feirberg's deputy, who chaired the planning and building subcommittee, in exchange for promoting business interests in the city.
Ashtrom and its Ashdar Building Co. Ltd. (TASE:ASDR) and Ashtrom Properties subsidiaries were the only companies to notify the TASE of the investigation today. "Avraham Nussbaum, the company chairman and one of its controlling shareholders, was questioned on suspicion of alleged bribery offenses in his position as an officeholder in the company in connection with a project of the company and its held companies," the TASE announcement read. It continued, "The company believes that there was nothing amiss in the behavior of Nussbaum or the company, and after the facts are clarified, it will emerge that his name was mentioned by mistake."
Ashtrom Properties launched its new Home Design site in Netanya in December 2013. Covering two floors with an area of 8,000 sq.m., the site was built on the ruins of the Kika, the Austrian brand, which opened to great fanfare and made an even bigger splash when it collapsed.
Ashtrom constructed the building according to Kika's needs as the sole tenant. When Kika collapsed, Ashtrom accordingly had to make investments in the building in order to enable multiple businesses to operate there. Nussbaum attended the launching event for the new site. Among the guests at the ceremony was Feirberg, who remarked humorously at the time that she hoped it was the last time she inaugurates the building.
Bribes for promoting projects
The bribery affair in Netanya involves suspicion that senior figures in the municipality and their associates promoted the interests of contractors and developers in Netanya in exchange for bribes and favors of various types. The municipality figures were allegedly in a conflict of interest situation, without reporting it, while those involved committed a series of offenses involving bribery, fraud, money laundering, and tax violations.
The affair became public last September with the arrest of contractor Avraham (Avi) Tshuva, brother of tycoon Yitzhak Tshuva; Tsafrir Feirberg, brother of Miriam Feirberg; Adv. Avraham Gugig; and architect Gabi Tetro. The investigation focused on suspected bribery, fraud, money laundering, and tax offenses involving a large number of real estate figures in Netanya.
The second wave of arrests in the affair included the mayor, who spent a week in jail, and was later released to house arrest under restrictive conditions. Among other things, she was barred from going to the municipality for 55 days, later extended for an additional 20 days. Feirberg was allowed to return to the municipality in early December, subject to various restrictions.
In addition to Feirberg, who has also chaired the Netanya Local Planning and Building Committee since 1998, those arrested included Eli Feirberg, her ex-husband, who is suspected of receiving a bribe and giving it to her, as well as receiving a bribe for himself; Shimon Sher, Miriam Feirberg's deputy until recently, who chaired the Netanya planning and building subcommittee, and who is suspected of accepted a bribe together with her; and contractor Genadi Aviyev, who is suspected of bribing senior figures in the municipality to promote projects in the city.
One of the real estate projects on which a substantial proportion of the investigation is based is the Coral project on Jabotinsky Street in Netanya, which contains a luxury tower located above the new Netanya promenade, a short distance from the sea. The project contains 52 apartments with large balconies overlooking the sea. Another project linked to the investigation is the Towers-T luxury project located in the Ir Yamim neighborhood in Netanya, with three towers and 215 apartments.
Published by Globes [online], Israel Business News - www.globes-online.com - on February 15, 2017
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