The transcripts of the investigation and some of the evidence in the bribery case in housing and construction that were first revealed yesterday (Thursday) in “Calcalist”, tell an extraordinary story in its dimensions in the Israeli capital market.
Read more in Calcalist:
In one of the most profitable and stable public companies in the field of infrastructure and real estate, revenues of NIS 6.5 billion, and an operating profit of NIS 1.08 billion in 2019, a corrupt and corrupting mechanism of fantastic payments, $ 16-18 million annually, to ministers and public employees was conducted for more than a decade. In Africa, Europe and Central America. 2% -3% of the money was on order. The proceeds from the bribe are worth about NIS 1 billion. Read and do not believe.
Everything is documented. on the table. Coupons and vouchers for bribe payments, cash, double-entry bookkeeping. Pay to win the tender, pay to increase payments, pay to reduce tax, pay to release bureaucratic delays, pay because, senior housing and construction officials claim, this is Africa. And so they work there. So let’s make money quietly, pay high salaries, distribute bonuses and dividends – because that’s how it works. And damn the law that was changed two decades ago and explicitly stated that paying a bribe in a foreign country is the same as paying a bribe in Israel.
The police and the Securities Authority, to their credit, investigated the company from the bottom up. From managers and employees in branches in foreign countries, through directors and managers to the controlling shareholder and right hand. All the stones were turned here. And not just because the evidence, according to the investigation file and factors involved in the investigation, is Awesome. Recordings, documents, records – and everything from time immemorial. This is not really a rehabilitation case and will fall on one witness, let’s say the accountant in Kenya Shai Skaf that the investigation file shows that he was not necessarily innocent.
Efrat Peled Photo: Uriel Cohen
But what will happen to the elements at the top of the pyramid? Suppose with Sheri Arison, the controlling owner, and Efrat Peled, right hand. Two who sat in the interrogation rooms and claimed they had no idea what was going on, but the evidence did not necessarily support it. Ask them to pay a bribe they probably did not ask for. To know, or should have known, about the mechanism – absolutely yes. A former CEO and VP who resigned testified that they shared this. They sat in board meetings from certificates where they spoke directly or implicitly about problematic payments. There is a limit to innocence.
Whatever the decision of the State Attorney’s Office, the professional decision is reserved even if it is not necessarily perfect, one thing is certain: housing and construction investors must not go over it in silence. Almost 20% of the company’s shares are in the hands of the institutional investors (Menora, Clal, Phoenix and Excellence), those who manage the pension savings of the people of Israel. Another 33% are in the hands of the public. It is their job to come to terms with the pockets of those in charge.
This requires first of all a change of attitude. A groundbreaking study by the Securities Authority published in 2019 shows how much this is not taken for granted.
The institutional bodies did not file in the court between 2011-2017 even a single derivative claim, in which they demanded to step into the company’s shoes and demand a return to the company’s coffers of bonuses and dividends received by executives, directors or controlling shareholders.
But that moment has come. Whether senior housing and construction officials, such as Arison and Peled, escape an indictment or not, it is time to demand that they return to the company funds obtained on the basis of corrupt and crooked conduct.