A Shapir subsidiary is suspected of bribing Romanian public servants to ensure it won a tender.
The international department in the State Prosecutor’s Office is conducting an investigation or a probe into suspicions that the manager of a Shapir Engineering and Industry Ltd. subsidiary’s business in Romania paid a bribe into accounts at an Israeli bank owned by Romanian public servants.
The alleged bribe took place before Shapir became a public company.
Shapir is controlled by four brothers: Israel, Harel, Gil, and Chen Shapira.
The suspicions being probed are that Avraham Morgenstern, former manager of Shapir Engineering and Industry Ltd.
Engineering sub-subsidiary Shapir Structures Romania, paid a bribe to Romanian public servants, thereby violating Israeli criminal law.
This investigation comes on top of investigations of billionaire Beny Steinmetz and Teva Pharmaceutical Industries Ltd. by the State Prosecutor’s Office on suspicion of paying bribes to foreign public servants.
According to information obtained by “Globes,” the State Prosecutor’s Office conducted a formal inquiry in Romania for the purpose of collecting evidence from the Romanian authorities about the alleged bribery. The Israeli authorities thereby joined an investigation on the subject that the Romanian authorities have been conducting since 2014.
According to the information obtained by “Globes,” the international department in the State Prosecutor’s Office contacted the Rumanian prosecutors early as June 2015 with a request for documents, correspondence, court documents, and any other information about bribes allegedly paid by Shapir Structures Romania (no longer an active company).
The investigation is focusing on a suspicion that Morgenstern bribed a Romanian politician named Radu Mazare.
The Romanian media reported that Morgenstern paid Radu, mayor of the city of Constanta, €175,000, allegedly to ensure that his company would win a contract/tender for building a residential project in the city worth an estimated €10 million. Neither Shapir Structures Romania, its owners, nor any officeholders other than Morgenstern were called in for questioning, nor was any indictment filed against them in Romania.
The information obtained by the State Prosecutor’s Office, which led, among other things, to the opening of an investigation, involved payments made through another Shapir Engineering group company, Larton Consultants, to a company controlled by an Israeli businessman registered in Lichtenstein, and from there through three bank transfers to two banks accounts.
One of the bank accounts was in the name of Mazare, suspected of being the main receiver of bribes, and the other was to an Israel Discount Bank account in Israel in the name of his brother, Alexander Mazare.
The draft prospectus published by Shapir Engineering ahead of its IPO in late 2014 stated, among other things, “Up until June 30, 2014, the company operated in Romania through Shapir Structures Romania, a fully owned subsidiary of Larton Consultants, a Cypriot company belonging to the Shapir Engineering group.”
The draft prospectus continued, “Starting in April 2014, the authorities in Romania have been conducting a criminal investigation against a former manager at Shapir Structures Romania into suspicions of an alleged bribe in connection with a project carried out by the group.”
The draft prospectus adds that Shapira Structures was required to furnish documents to the Romanian investigative authorities, and that the former manager had been barred from leaving the country.
Shapira Engineering said in response, “We do not comment on probes and investigations that have not been formally announced, whether or not they are taking place now.
We neither confirm nor deny the existence of these probes/investigations.