Israel Electric Corporation accepts S$33.1m settlement from Siemens

THE main supplier of electrical power in Israel has accepted a multi-million dollar offer from German engineering conglomerate Siemens to settle a dispute.

The Singapore-listed Israel Electric Corporation (IEC) said in a release to Singapore Exchange on Tuesday night that Siemens Israel had agreed to pay 90 million Israeli new shekels (NIS) (S$33.1 million) as profit repayment to dismiss its suit against Siemens for kickback payments.

Siemens Israel is an arm of the German-based international engineering conglomerate. The Israeli government owns approximately 99.85 per cent of IEC, which is also listed in Tel Aviv.

These kickbacks were made by Siemens to "elements at the company" in connection with agreements between the company and Siemens for the purchase of five gas turbines and associated services for the company's power plants, as well as in a transaction for the purchase of a DMS system. Israeli media reports said that these kickbacks happened between 1999 to 2005.

The settlement meant that IEC reserves its rights to continue pursuing its suit against former director Dan Cohen as well as suing any others who received kickbacks so that the full sum can be paid to the company.

The company also retains its right to continuing pursuing its suit against other parties involved in the affair, through whom the kickbacks were paid,

Tuesday's announcement comes months after Israel's justice ministry said in May that Siemens would pay a 160-million NIS penalty. It would also appoint an external inspector to supervise its business in Israel in exchange for state prosecutors dropping charges of securities fraud against the German company.

The Israeli Securities Authority had launched its investigation into Siemens in 2009, said the reports.