One upset follows another for the United Sarona buyers' group formed to buy 550 apartments in Sarona, Tel Aviv. Sources inform "Globes" that nine of the group's members, represented by Adv. Itay Lasky and Adv. Eli Pitaro from the Pitaro & Co. law firm, have asked retired Supreme Court Justice Zvi Zybertal, an arbitrator for the group's affairs, for the disclosure of documents that they say "will open a Pandora's box."
Their request was sent shortly after hundreds of the group's members were notified that they would have to make payments to the project's fund in order to promote its construction. The request was delivered by BSR Engineering and Development Ltd. (TASE:BSRE), controlled by Nachshon Kivity, which is managing the project. Several members of the group assert that the estimates used by BSR are not being disclosed, and in order to understand how the calculation was made, they are asking for a disclosure of documents proceeding.
"The requested documents state, apparently for the first time, the true dismal story of the entire project, including the people behind it, and the real interests underlying it. They shed light on all of the facts," states the request, which gives the feeling that members in the group have lost confidence in some of the other members.
Moti Peled founded United Sarona in 2016 as part of the Minhal Megurim Israel company. United Sarona won a tender for nine dunam (2.25 acres) of land formerly used by the Israel Broadcasting Authority (IBA) with an unprecedented NIS 1.24 billion bid. Financial problems emerged shortly afterwards, including problems in financing the project, which led to BSR replacing Minhal Megurim as the head of the project. It was learned in recent months that in order to push the project through, the group's members would have to add sizable sums beyond the initial calculation and take a NIS 1 billion loan - a proceeding that aggravated the rift between the group's members.
The documents, the disclosure of which is being sought, include a list of all the transactions in the project, with a suspicion that some members of the group received better terms than others. "The decision-makers in the group are two institutions: representatives and a general meeting. At the general meeting, the voting rights are not distributed democratically," Lasky claims, and adds, "BSR and the representatives announced that the increase in prices (for the apartments, G.N.) would be 40%. It has now been learned that the increases will be 60%. People can't pay it. Obviously they are angry."
Published by Globes, Israel business news - en.globes.co.il - on December 25, 2019
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