BUSINESS I
AN UNBELIEVABLE SALE!
FINE DESIGNER FURNITURE
01%
OFF
Israel Forgets Public
With Privatization
JOEL BAINERMAN
Special to The Jewish News
flu
5TAKE AN ADDITIONAL
W
0
THE ALREADY
WE'RE OVERSTOCKED!
IMMEDIATE DELIVERY • NOMINAL CHARGE
GROUPS SOLD AS COMPLETE SETS • NO LAYAWAYS
LARGE SELECTION TO CHOOSE FROM
SAT. & SUN. • NOV. 18 & 19
SHERWOOD STUDIOS
FARMINGTON HILLS
INDUSTRIAL CENTER
CLEARANCE CENTER
24734 CRESTVIEW CT.
FARMINGTON HILLS
Phone: 476-3760
HOURS: SAT. 10-5 • SUN. 12-5
OVER 60
"Your No. 1 Financial Fear Should Be
The Cost of Long Term Nursing And Home Care Expenses
"Medicare & Catastrophic Insurance Plans Won't Payl" •
MONEY — April 1988
Protect Your Hard Earned Assets From Financial Ruin
co'? THE BENSMAN GROUP NOW
The Leader and Pioneer of Long Term Care Protection in Michigan.
We Carry All The Major Policies Listed In Consumers Report and
Money Magazines To Meet Your Individual Needs & Pocketbook!
Call Us Now at 855-4524 for A FREE Personal Consultation
In Your Own Home or At Our Office
THE BENSMAN GROUP
"THE LEADERS AND SPECIALISTS IN SENIOR
INSURANCE PROTECTION FOR OVER 40 YEARS"
30230 Orchard Lake Road
Farmington Hills, MI 48018
(313) 855-4524
Also Tune into Lawrence and Daryl Bensman on "The Senior Spotlight" every Wednesday at noon, WCAR (1090 AM)
WE CONDUCT NURSING HOME AND HOME CARE INSURANCE SEMINARS - ORGANIZATIONS PLEASE CALL
UNIVERSAL WATCH REPAIR
Why Monkey Around? Trust Your Watchmaker!
Now —
breast. cancer
has no place to hide
in Michigan.
Call us.
.
Regular Watch
Clean
$ 19"
$1 0 °
Regular Quartz Watch
Reg. Watch Battery
With Coupon
Expires Nov. 1, 1989
29 95
Clean
WE DO REPAIRS FOR OVER 120 JEWELERS
Don't throw away your old
watch . . . let us convert it to quartz
Parts not
incl.
559.5329 ADVANCE BLDG. 9 Mile & Greenfield st #35b
58 FRIDAY NOVEMBER 17 1989
til AMERICAN
CANCER
SOCIETY`
hen the Israeli
government an-
nounced its plan to
privatize the majority of its
192 state-owned enterprises
four years ago, international
investors were intrigued. Now
the grand sale, as it's called,
has turned into the grand
mess.
The Israeli government con-
trols 12 percent of all
business activity, employing
65,000 workers with an an-
nual production of $6 billion
and exports of $1.6 billion.
In the first stage of the
plan, eleven government-
owned businesses are ex-
pected to bring in $700-800
million. Topping the list is
Israel Chemicals, El Al
Airlines, Oil Refineries
Ltd., Bezek Telecommunica-
tions Company and Israel
Electric Company. _
The grand sale got under
way in early 1987 when the
government sold its share in
Haifa Chemicals to a U.S.-
based investors group headed
by former Israeli Arye
Genger, a friend of Airel
Sharon, and billionaire
Meshulam Riklis. Last
spring, Australian Jewish
millionaire Jack Lieberman
paid $95 million for the
government's portion of the
Paz Oil Company.
In recent months, the
Jerusalem Economic Cor-
poration, a real estate and in-
dustrial park builder, was
sold to Bear Sterns, an
American investment bank,
for $53 million. In the
Jerusalem Economic
Cooperation (JEC) and Paz
deals, secret bids were given
and accepted without the
public's knowledge. In all
three cases, critics of the
government's handling of the
sales say that political con-
nections were responsible for
the three foreign investors
getting a bargain. Now they
stand to make millions in the
next few years by selling
shares of their newly privatiz-
ed companies on the Tel Aviv
Stock Exchange. A recent
report on the government's
selling of state-owned enter-
prises claimed that Paz was
sold to Australian milionaire
Jack Lieberman for $81
million, and not the $97
million originally claimed by
the government.
"Instead of increasing
foreign investment in the
country, we stand to lose hun-
dreds of millions of our own
money," cried an editorial in
the Hebrew daily Yediot
Aharanot." The paper
criticizes the government for
not floating these companies'
share on the Tel Aviv Stock
Exchange and then let the in-
vestors take over the com-
panies at stock prices, which
would more accurately reflect
their worth.
- Zef Refuah, head of
the Government Corporation
Authority, says Israel can't
adopt the British system of
selling shares directly to the
public- because Israeli cor-
porations are smaller, and the
country lacks a serious stock
exchange. In Israel, he points
out, it is the pension funds,
not the public, which have the
spare cash.
Yet Sam Bronfeld, Tel Aviv
Stock Exchange deputy
manager, disagrees and says
the Israeli public should have
come before foreign investors.
At least 50 percent of the
shares of a company to be
privatized should be offered to
4
the public, he syas.
Instead, the governMent
allowed foreign investors to
sell shares only to those who
could buy in bulk at below-
market prices. He insists the
only way the stock market
will become a "serious" stock
exchange is' when large •
government corporations use
it as a-vehicle to raise money.
Hevrat Ovadim, the
economic arm of The
Histradrut and Israel's other
major economic force, has also
forgotten about the public in
•
its bid to sell off assets. All
told, Hevrat Ovadim controls
more than 25 percent of
Israel's industry and com-
merce, employs 260,000 peo-,
ple. and produces more than
one-fifth Israel's GNP.
Door Industries, Israel's
largest conglomerate (which
had 1988 sales of $2.3 billion)
4
and The Histadrut's greatest
asset, is smothering under
losses of more than $300
million per year. It recently
put Tadiran,. the country's
largest consumer electronics
firm and second largest
defense contractor, on the auc-
tion block, and looked to
wealthy Jewish businessmen
such as Shaul Eisenberg and
Carlo De Benedetti, as poten-
tial buyers, not the Israeli GI
public.
Despite the socialist origins
of Israel, the government
decided not to give the 1.6
million members of The
Histadrut a chance to buy a
piece of the companies for
which they work. 111
•
•
•
•