Forbes|Tim Daiss: In a convoluted development intersecting the energy sector and Middle Eastern geopolitics, media in Israel is reporting that Israeli Attorney General Avichai Mandelblit has ordered a police probe into allegations that Israeli Prime Minister Benjamin Netanyahu�s personal lawyer, David Shimron, used his close relationship with the Israeli leader to influence him to award a $1 billion contract to build three navy submarines to ThyssenKrupp, a German multinational conglomerate with a 4.5% ownership stake held by the Iranian government.
The subs will be used to protect Israel�s massive offshore natural gas field in the Mediterranean. According to a report on Friday in The Times of Israel, Shimron was a representative of the company in Israel. The inquiry will also focus on a separate 2014 Defense Ministry tender for navy ships, also involving ThyssenKrupp.


Israel�s Yedioth Acharonoth newspaper reported on Friday that the intersect between ThyssenKrupp and the Iranian government began in the 1970s during the reign of the Shah of Iran. The Shah�s government was later toppled during the Iranian revolution in 1979.



During 1974, the Iranian government invested $400 million in the German conglomerate, a 24.9% stake, which was inherited by Iran�s current Islamic government. At the time ThyssenKrupp was mostly building steel, and not yet in the shipbuilding business.


In May 2003, as a result of President George W. Bush�s pressure on Europe to restrict their business with Iran, ThyssenKrupp "made a bitter decision and repurchased 16.9 million shares from its Iranian partner, IFIC, for $437 million,"�Reza Yeganehshakib, a professor of Middle Eastern studies at Fullerton College and a geopolitical and energy analyst told me on Saturday. IFIC is the Iranian government's main avenue for investing abroad.
Yeganehshakib said that ThyssenKrupp paid Iran $24 per share while the market price at time was only $8.92 per share. He added that the German company tried to have the U.S. Department of Commerce reimburse�it for its loss, but to no avail.



However, Iran is still making handsome profits from its long-time investment in the German company, earning approximately �2 billion ($2.13 billion) from ThyssenKrupp dividends.

Netanyahu said last month he didn't know of Shimron�s ties to ThyssenKrupp. However, there is growing�pressure over allegations that he pushed for buying the submarines from ThyssenKrupp despite opposition from the country�s defense establishment, though the Israel military has made a statement contradicting these claims.

Twice in six months

This development is the second time in the past six months that former Israeli-Iranian ties have intersected the present. In August, the Swiss Federal Tribunal, Switzerland's highest court, ordered Israel to pay $1.1 billion plus interest to Iran in a decade�s old dispute over a secretive oil pipeline predating Iran�s 1979 Islamic revolution. The verdict was dated June 27. Israeli media broke that particular story in August.