In Africa-Israel, the weekly Torah portion is developing nicely. Initially viewed as a quixotic whimsicality, the appointment of a company officer of religion proves to conform to the ideology whereby the activity of one of Israel’s most outstanding investment firms will in future be guided. Another battle front is being opened up in the secular-religious war.
The affair raises a number of issues:
- When Lev Levayev decided to bid for the acquisition of Africa-Israel, sparing no effort to outdo the other contenders, he knew the company owned hotels that operate on the Sabbath as well as shopping malls, a considerable proportion of whose business turnover derives from Sabbath operations. He may also possibly have known that some company-owned businesses were selling non-kosher food. Assuming he knew all this, why did he not announce, as soon as he was declared the successful bidder, that he intended to institute more scrupulous observance of religious precepts than had hitherto been the case?
- Why did Bank Leumi, holder of 25% of Africa-Israel, keep silent for so long, arousing itself only after Eli Yunis, representing South African investors, decided to come out openly against Levayev?
Levayev is entitled to run the company as his principles and religious ideology dictate. The religious public will reach its conclusions, and the secular community is also entitled to pass judgement. The question is, what happens when Levayev’s ideology comes into conflict with the company interest. The company’s directors are committed to act on behalf of the company, not on behalf of the shareholders. A problem arises in cases where the shareholders gain but the company suffers.
The market takes the straightforward view that things on now on a downward track, plain and simple. Since the affair surfaced, Africa-Israel shares have lost 25% of their value. Investors harbour no doubts: the Sabbath affair development will be prejudicial to the company and its profitability.
In terms of its impact on the company’s business, the Africa-Israel Sabbath affair will not stop at the Ramat-Aviv mall. The ultra-orthodox image the company is now assuming is one that will be hard to shed. Thus, for example, a secular holiday-maker may prefer not to use an Africa-Israel hotel, where he will feel restricted, and may opt for another, nearby hotel instead.
The affair raises one moot point. Was Levayev not obliged, while the tender was in progress, to disclose to Bank Leumi what he had in mind for the company? The bank is, after all, still a partner in Africa-Israel. Was it not entitled to be informed of Levayev’s plans to recast the company in a religious mould, and take them into consideration as one of the factors in deciding to whom to award control of the company? Has Levayev not pulled off a sort of a kosher coup?