Gad Zeevi paid $1 million to Adv. Yigal Arnon for representing him in negotiations with the Ministry of Communications in Zeevi’s acquisition of 19% of Bezeq (TASE: BZEQ). This was learned from transcripts compiled from a police wiretap of Mikhail (Misha) Chernoy, who has been indicted with Zeevi in the affair. The transcript indicates that Zeevi’s aim was to obtain control of Bezeq.
At the time, Arnon was chairman of First International Bank of Israel (TASE: FTIN1;FTIN5), which organized the consortium that loaned Zeevi the money to buy the Bezeq shares. Former Discount Investment Corporation (TASE: DISI) CEO Dov Tadmor, whom Arnon represented in the trial in the Iscar affair, initiated the transaction.
Talks between Chernoy, Zeev Rom, and their confidants show that Zeevi paid Adv. Yaakov Neeman $200,000-250,000, and Adv. Michael Komissar $400,000.
It has also been learned that the banks have lost again from their business with Zeevi. At the end of last week, Texas businessman J. Livingston Kosberg acquired Zeevi’s debts to the banks, stemming from Japanauto, for $45 million.
Two days later, Zeev signed a deal to sell 50% of Japanauto, the authorized Israeli dealer for Japanese auto manufacturer Subaru, to Gmul Investment Co. Ltd. (TASE: GMUL) subsidiary Electronics Line (TASE: ELEC; XETRA: EIC) at a company value of $60 million. The parties will act to obtain external financing to pay Japanauto’s debt to Kosberg. After new financing is obtained, Kosberg and Zeevi will share a $15 million profit on Kosberg’s purchase of the debt.
A source close to First International Bank and Israel Discount Bank (TASE: DSCT), creditors of Japanauto, asserted today that, although the sale of debt reflected a 30% discount, the banks were very satisfied with the sale. The banks believe that the alternative of appointing a receiver for Zeevi’s shares in Japanauto would entail high costs, take a long time, and risk the loss of Japanauto’s Subaru franchise.
Figures for Japanauto attached to Electronics Line’s report to the Tel Aviv Stock Exchange indicate that Japanauto’s 2004 turnover was NIS 518 million, up 17%, compared with 2003.
Japanauto’s gross profit margin was 11%, compared with 10.5% in 2003, and its operating profit margin was 3.3%, compared with 2.1% in 2003. Net profit was NIS 6.7 million, 450% more than the company’s NIS 1.2 million net profit in 2003.
Published by Globes [online] - www.globes.co.il - on April 25, 2005