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Iran holds shares in company selling submarines to Israel

Despite seeking for years to prevent other countries from doing business with Iranian-held companies, Israel is buying submarines designed by ThyssenKrupp, of which Iran holds 4.5% of the shares; Ministry of Defense says it has no knowledge of Iranian involvement in the company providing submarines, one of the IDF’s most classified projects.

Submarine INS Rahav (Photo: IDF Spokesperson)

Israel has struggled for years to prevent other countries from doing business with any sort of Iranian country, and yet it has come to light that Israeli money paid to the German-based conglomerate ThyssenKrupp in the submarine deal will end up in Iranian hands.

ThyssenKrupp Marine Systems (TKMS) designs the submarines, along with the Sa’ar 6-class corvette warship, for the Israeli Navy. The Iran Foreign Investment Company (IFIC), which is government-owned, holds nearly 5% of ThyssenKrupp’s shares. IFIC, the Iranian government’s main avenue for investing abroad, purchased the shares principally via two subsidiaries.

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This also raises questions about the level of access the Iranian shareholders would have to one of the IDF’s most classified projects.

According to data released by IFIC in 2011, it holds 4.5% of ThyssenKrupp. In a 2016 interview with The Business Year, Dr. Farhad Zargari, Managing Director & Chairman of IFIC, confirmed that the company still holds share in the German conglomerate, though he did not specify the amount. According to IFIC’s website, 57% of its investments are in Europe.

Iran’s historical involvement in ThyssenKrupp was more significant from 1974 to 2003. Then, when US President George W. Bush declared Iran to be part of the “Axis of Evil, ” Washington threatened to refrain from signing new deals with ThyssenKrupp if Iran’s then 7.8%-holding in the company were not reduced. To do so, Thyssenkrupp purchased 17 million of its own shares at the cost of €400 million, reducing Iran’s percentage to 4.5.

The Israeli Ministry of Defense said in response that they do not know of any Iranian involvement in the company.

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