WORLD NEWS | Mon Nov 28, 2016 | 10:19am EST

'Submarines affair' prompts investigations in Israel and Germany

By Luke Baker | JERUSALEM

Questions over the purchase of German submarines that started with media reports of a potential conflict of interest involving Prime Minister Benjamin Netanyahu's lawyer have mounted in the last 10 days, spurring investigations in two countries.

At one level the issue is straightforward: Israel wanted to replace some of its ageing submarines and maintain its military edge against potential threats like Iran, so it ordered three new submarines, costing $1.5 billion, from Germany's ThyssenKrupp Marine Systems, with delivery in about a decade.

The first sign of a hiccup arose when Israeli media pointed out that the intermediary on the deal, Israeli businessman Miki Ganor, had retained Netanyahu's personal lawyer, David Shimron, to act on his behalf in the transaction.

Netanyahu and Shimron have denied any impropriety. Shimron said he never discussed the deal with the prime minister so as to avoid any conflict of interest, and Netanyahu has given his full backing to his lawyer, who is a distant relative.

But ThyssenKrupp now says it was not aware Ganor had engaged anyone else on the deal and is carrying out an internal investigation to establish whether any rules were broken.

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