Order Probe of Israeli Firms
Menu JTA Search

Order Probe of Israeli Firms

Download PDF for this date

Attorney General Meir Shamgar has instructed police to begin an official investigation into the financial affairs of the Israel Corp., the Zim Lines and the Haifa Refineries all of which had large sums of money invested in the troubled financial empire of Swiss Jewish banker Tibor Rosenbaum. The key figure in the investigation is Michael Tsur who was managing director of the Israel Corp. and chairman of the Zim Lines until ousted last month when the Rosenbaum scandal broke.

The police are also expected to question Zim’s treasurer, the auditors of the Israel Corp. and board members of companies headed by Tsur. The latter was suspended by the Israel Corp. for allegedly investing large amounts of money earmarked for Israel’s capital development in several dummy corporations maintained by Rosenbaum in Vaduz, Lichtenstein, a favorite tax haven of international finance. Tsur allegedly made the transactions without the knowledge or authority of the Israel Corp. board.

Tsur, a former director general of the Ministry of Commerce who the government put in charge of Zim Lines in 1967 when the national shipping company was experiencing severe losses, has issued a statement to the press denying the findings of a special Zim investigating panel. The panel found him to be solely responsible for questionable foreign currency transactions. Tsur claimed the charges were baseless.

But Tsur admitted publicly a week ago that the shipping company maintained a secret account with Rosenbaum’s International Credit Bank in Geneva from which it paid bonuses to top executives in order to evade income tax. Tsur blamed Israel’s “faulty” tax laws for making such machinations necessary and claimed that the tax authorities had private knowledge of the bonuses. intimating official complicity in the evasion.

The collapse of Rosenbaum’s enterprises also has involved Histadrut’s powerful construction company, Solel Boneh. Investigations have established that Solel Boneh played a part in financing Rosenbaum’s activities to the extent of $3.4 million invested in his various concerns. Solel Boneh’s director general Tzvi Rechter has been held responsible and he was given to understand that his resignation would be accepted. So far, Rechter has refused to submit it and demands for his immediate suspension have been made.

Founding Funders

The digitization of the JTA Archive would not have been possible without the generous support of the following donors:
  • The Gottesman Fund
  • Righteous Persons Foundation
  • Charles H. Revson Foundation
  • Elisa Spungen Bildner and Robert Bildner, in honor of Norma Spungen
  • George S. Blumenthal
  • Grace and Scott Offen Charitable Fund