Edmond Safra's sudden death will not affect the Safra family's business in Israel. Statements to this effect were made today by all his representatives and associates in Israel.
On the face of it, this is a predictable announcement. After all, we're talking about the death of one of the richest people in the world, who has considerable business in Israel. Yet in Edmond Safra's case, the announcement had already been drawn up in advance, and preparations had been made for his departure. The way he died was unexpected, yet his death was not. Edmond Safra had been suffering from Parkinson's disease for the last nine years, and his condition gravely deteriorated in the past two years. This prompted him to make the necessary preparations.
Safra drew up a will about two years ago, appointing his young brother, Joseph as his official successor for managing the family's businesses around the world, including in Israel. In the last two years, since his condition deteriorated, Edmond Safra lowered profile in many of his operations, focusing mainly on the transaction involving Republic National Bank, in which he had a controlling interest.
Responsibility for Israel operations was confided, quite some time ago, to Joseph Safra. Yet it was not always this way. Edmond Safra headed the family ever since the father, Jacob, died in the 1960s. Edmond was credited with the expansion and prosperity of the family's banking operations around the world, outside of Brazil. He also entered the Israeli market. He founded Republic National Bank in the 1960s, and worked to expand its operations for 20 years.
One of Edmond Safra's main reasons for not operating openly in Israel in those years was his business ties with the Arab world. The family secretly made donations to Israeli institutions, yet refrained from engaging in business activity. He is believed to have donated tens - if not hundreds - of millions of dollars to recipients in Israel and around the world. Most of the recipients in Israel were religious institutions, notably those affiliated with Shas.
The Safra family's business involvement in Israel started in 1986, when late businessman Jacques Nasser bought the controlling interest in The First International Bank for $21 million from the Danot group's receiver.
It was later estimated - and Nasser himself publicly claimed later on - that he was working as a straw man for Edmond Safra.
The juiciest business affair at the time was the highly publicized conflict between Safra and American Express. For the first time in his life, Safra who had always shunned the limelight, found himself involved in a harsh and public struggle. He claimed that American Express was guilty of libel in his regard. Ultimately, American Express had to pay him $8 million in compensation. He donated the money to charity.
Although brothers Joseph and Moise Safra "bought" the controlling interest in The First International Bank from Nasser in 1990, it was clear to everybody that Edmond was the man behind the deal, as he was behind all the family's operations.
In fact, the brothers are indistinguishable when it comes to the family business. When Edmond wanted to buy the controlling interest in Bank Leumi in 1993, the Bank of Israel demanded that he family commit itself to selling The First International Bank. In the end, Edmond backed out.
The Safra family has earned its reputation thanks to its ramified banking operations, but Joseph Safra involved it in another sector, which currently represents a considerably chunk of its business. Joseph Safra has been responsible for the family's business in Brazil and South America for 12 years. It was his idea that the family should go into telecommunications, and it was he who established the ties with BellSouth. The family's investment in Israeli company Cellcom is considered successful, but its genuine achievement is its involvement in the project of setting up a cellular network in Sao Paolo, Brazil, at a $4 billion investment.
In view of the success achieved by Joseph Safra, under whose management the family's banking business in South America prospered, associates were not surprised when Edmond chose him as his heir as manager of the family businesses on July 2, 1998.
Despite the announcement, not a year had gone by before Edmond decided to sell Republic Bank, the core of the family business. Some say the move was intended to avert future conflict between his brothers, Joseph and Moise. Others contend that his brothers preferred to pursue their own activities, and expressed their joint wish to have Republic Bank sold.
Whatever the case, Edmond Safra put all his business affairs in order when he was still alive. Since he had no children of his own, he opted for setting things right in advance. The business empire is therefore unlikely to be rocked by his death.
Published by Israel's Business Arena December 5, 1999