The Ministry of Finance is demanding that Israel Chemicals (TASE: ICL: NYSE: ICL) management provide clarifications about activities that apparently contravene the conditions of the government's golden share. The allegations were first made yesterday by the heads of Israel Chemicals workers committees to Prime Minister Benjamin Netanyahu.
The workers committees assert that Israel Chemicals did not ask the state for permission to transfer its activities overseas, even once over the past seven years, although, according to the workers committees, this is required under the golden share terms.
This morning, Netanyahu spoke about the crisis at Israel Chemicals and said that he had instructed, "The Accountant General at the Ministry of Finance to undertake a broad examination of the issue and the company's position on the terms of the golden share due to the company's actions in recent years and its investments in Israel, as well as its future work plans, and the recent layoffs of employees."
Shortly afterwards, Ministry of Finance legal advisor Adv. Yoel Briss today sent a letter to Israel Chemicals CEO Stephan Borgas demanding information about the transfer overseas of the company's activity and that of its subsidiaries. Among other things, Briss asked for information about the moving of production lines, marketing set-ups, assets essential to the existence of Israel Chemicals, know-how and technology, other substantial activity or the conducting of such activity, and the transfer of "key service factors."
Briss is also asking whether the company plans to change the ratio between its activity in Israel, that of its subsidiaries, or that of the entire group to overseas activity.
Briss's letter following an initial letter dated February 23 asking for information and explanations about the layoffs plan announced by Israel Chemicals. Today's letter follows a series of assertions aimed at Prime Minister Benjamin Netanyahu concerning the breaching of the golden share terms raised yesterday by the workers committees at Israel Chemicals and at Bromine Compounds.
Israel Chemicals stated, "There is no connection between the state's golden share in Israel Chemicals and regular management of the enterprises and the need for cutting costs at the company's plants. The streamlining plan is designed to strengthen and safeguard the existing of the plant in Israel, while ensuring the company's competitiveness against its major competitors in the global markets in which it operates."
Combative atmosphere
The heads of Israel Chemicals workers committees attended a Likud activists meeting in Holon last night attended by many of the party's leading activists. Dead Sea Works workers committee chairman Armand Lankri had been scheduled to take part in the major "change of government" rally in Tel Aviv organized by left-wing parties. Following Lankri's change of plans, there were allegations of political payback. Lankri who heads the Likud party in Dimona told "Globes" that he announced the cancellation of his participation in last night's rally last Sunday, after it became clear to him that the event would have a distinct political orientation. He said that contacts to set up a meeting with Netanyahu took place throughout last week. Lankri also stressed it was more important to meet Netanyahu because that was in the best interests of Israel Chemicals remployees.
The meeting with Netanyahu was also attended by Bromine Compounds workers committee chairman Avner Ben-Senior and Dimona Mayor Benny Biton and Minister of Energy Silvan Shalom. Netanyahu reportedly told those present that he would instruct the Ministry of Finance to send a letter today seeking clarifications about the golden share, and that he would discuss the situation at Israel Chemicals at the start of today's cabinet meeting.
Published by Globes [online], Israel business news - www.globes-online.com - on March 8, 2015
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