Attorney General gives green light for IMI privatization

Avichai Mandelblit
Avichai Mandelblit

Privatization has been delayed for months by a State Comptroller inquiry.

Attorney General Avichai Mandelblit is giving a green light to go ahead with privatization of Israel Military Industries Ltd. (IMI). In a recent meeting with Ministry of Defense director general Maj. Gen. (res.) Udi Adam, Mandelblit made it clear that he saw no reason that the privatization plan should not continue, despite the criticism of the process by the State Comptroller's Office. A document summarizing the meeting between the two men stated that the materials delivered by State Comptroller Judge (ret.) Joseph Shapira contained nothing bringing continuation of this process into question.

The IMI privatization has been stalled for many months by the State Comptroller's inquiry. The State Comptroller's Office formulated a draft audit report at the beginning of the year, which cites a long series of faults in the process. The State Comptroller's findings were given to those criticized for comment in December, and those involved in the process believe that he will publish a final report on the matter in the coming weeks.

The Government Companies Authority, headed by Ori Yogev, led the privatization process. One of the main criticisms of Yogev by parties involved in the privatization relates to the fact that Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) was the only company to reach the final hurdle in the process, after other groups and companies that competed in it lost interest in acquiring IMI or abandoned the process. Senior Ministry of Finance sources warned against a possible acquisition of IMI by Elbit Systems, which would become a monopoly in the arms industry. In view of the findings in the draft report, the Ministries of Finance and Defense directors general Shai Babad and Adam appointed Maj. Gen. (res.) Yaakov Amidror as an "independent examiner" to check the IMI privatization process conducted by the Government Companies Authority.

According to what was agreed at the time, Amidror was to submit his recommendations in mid-February. Due to personal circumstances, however, he is now expected to submit his recommendations at a later date. Amidror's probe is also supposed to address the possible effect of selling IMI to Elbit Systems on other defense companies. While that was happening, IMI chairman Yitzhak Aharonovich and Israel Land Authority (ILA) chairman Adiel Shimron agreed in recent days to shorten the timetables for moving the company's plant from Ramat Hasharon to Ramat Beka in the Negev, thereby enabling IMI to begin operating from the Negev in 2020. Under this plan, which was recently deposited, IMI will transfer 500 dunam (125 acres) of land from the area it holds in Ramat Hasharon to the ILA by the end of the year. The land will be used in the future for construction of thousands of housing units.

Published by Globes [online], Israel Business News - www.globes-online.com - on March 2, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

Avichai Mandelblit
Avichai Mandelblit
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