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Gibraltar Registered Offshore Company Facing Charges In Israel

Iberia News

06 October 2000

This story is reproduced by Iberia News at http://www.iberianews.com

Direx, a Petah Tikva based bio-tech company, and owned by Moshe Ein-Gal, is reported to be facing indictments for tax evasion, with the Income Tax Commission in Israel as authorities draw up a distinction between legitimate tax planning and illegal fictitious deals.

The Direx case was alleged to have been exposed in January 2000, when Moshe Ein Gal was arrested. According to reports the two off-shore companies facing charges are alleged to be controlled by the same shareholders that control the Israeli company. Direx is reported to have been registered as owned by the companies in the Gibraltar tax haven, but according to allegations is in fact reported to be controlled and owned by Ein Gal, through a trustee. Ein Gal is suspected of concealing the fact that he had a stake in these companies, in order to fraudulently receive tens of millions of dollars in tax benefits in 1987-1999.

Tax experts in Israel are reported to be divided on whether the Income Tax Commission was right in initiating the indictment against Direx based on the fact that the shareholders in Israel and abroad are one and the same. Other experts are reported to maintain that this is a classic case of tax fraud, perpetrated in the full knowledge that that was the case.

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