Police Probe Financial Affairs of Bankrupt Motor Company

Police began an investigation today into the financial affairs of the bankrupt Autocar Co., the Israeli subsidiary of the British Leyland Motors Corp. which was put into receivership last Nov. 3. The matter was turned over to the police by States Attorney Meir Shamgar yesterday after the Knesset’s economic committee heard an account of alleged bribery, tax evasion and fraudulent bookkeeping from Ephraim Levandovsky, comptroller of the firm.

Itzhak Shubinsky, an emigre industrialist from Poland who was formerly managing director of the company, claimed today that “a mysterious hand” was conducting a “smear campaign” against him. He denied all charges.

Autocar, 20 percent owned by the British parent firm, assembled Triumph automobiles at plants in Haifa and Ashdod which employed more than 1,500 workers. The company had debts of $9.8 million on annual sales of $42.9 million. Levandovsky told the Knesset committee that its books were doctored to make losses appear substantially smaller than they were. He said he had seen a list of names of Israeli civil servants who apparently were sold cars at large discounts. Levandovsky was appointed comptroller by the company’s now defunct board of directors. The receiver released him from his pledge not to discuss company affairs in order that he could testify before the Knesset committee. According to Levandovsky, the board of directors knew of some improprieties and suspected others but took no action to halt the practices.

British Leyland’s abandonment of its Israeli subsidiary raised charges at the time that it was yielding to pressure from the Arab League boycott. It was pointed out, however, that Israel’s market for sophisticated automobiles was larger than that of all the Arab states combined. But Leyland sales declined here after British Ford introduced its Escort model to the Israeli market. Moreover, the Israeli government is gradually reducing tariff protection for locally assembled automobiles.