At the age of 75, after 10 years on the sea,
Morris Kahn wants to feel solid ground beneath his feet. However, he knows that
he must get rid of all his options and shares in Amdocs before he can do so.
Otherwise, the income tax authorities will lay their hands on a large slice of
his fortune. Yes, the rich, too, have problems.
Much has been written about Morris Kahn’s
charisma, his extraordinary influence on foreign investors, his astounding
ability to form world-embracing business connections and his exceptional
characteristics as an untiring entrepreneur. Practically nothing has been
written about the fact that Morris Kahn has invented the tax planning of the
When asked, “What do you know about Morris
Kahn?” most of the people interviewed for this article replied, “He lives on a
yacht, doesn’t he? No. I don’t know anything about him.” The mysterious Israeli
billionaire, often compared to Howard Hughes, loves the sea and the sea
apparently loves him. So much so that during the past 10 years it has provided
him with an extremely effective shelter from the iron jaws of the capital
taxation system of countries worldwide.
Actually, Morris Kahn and his partners, the
brothers Zvi and Shmuel Meitar’s tax plan has been executed in several ways. The
most simple was the founding of the Aurum company. After 20 years during which
Morris Kahn and Shmuel Meitar built the Aurec-Amdocs empire, in the past two
years they have been dismantling it and liquidating their
Investing the Amdocs loot
Right now, the two are investing all the money
from the realization of the shares of Amdocs International (which holds Amdocs
Ltd., traded in Nasdaq) through Aurum. Aurum is owned and managed by Paz
Littman, who used to be lawyer Zvi Meitar’s partner. Contrary to common belief,
Aurum is not owned by Aurec, but is directly owned by Kahn and
Incidentally, the Latin word Aurum means
“gold.” Aurec’s name also derives from this root. Hence the suffix “gold,”
appended to the names of its subsidiary companies.
So, where is Kahn currently investing the 1.5
billion dollars that he realized from his investments in Amdocs? It turns out
that the investment trust, Aurum, is investing most of the money coming in from
the realization of Morris Kahn and Shmuel Meitar’s shares in investments
involving no risk, such as in US Treasury bonds. At the same time, the trust is
also investing in biotechnological and telecommunication companies, mostly
Among other things, Aurum holds 100% of the
venture capital fund Aurum-SBC, which focuses on investments in companies that
develop technologies for the telecommunications sector. As far as it is known,
Aurum has invested in the Israeli startup companies NetMount and Pontic Systems.
Sources within the sector say that Aurum is investing in an additional,
undisclosed, venture capital fund.
The tax planning here finds expression, among
other things, in the fact that investments in US Treasury bonds through a third
party (in this case, Aurum) exempt legatees from having to pay inheritance taxes
and exempt Kahn from having to pay other taxes. This, apparently, was the
decisive factor in Kahn’s considerations regarding what investments to
Tax planning is also the reason why Amdocs’s
directors and managers do not hold shares directly but, rather, through holding
Other Kahn investments are apparently in
projects connected with tourism, the largest and most important being the Coral
World company, which establishes underwater observatories and which Kahn holds
together with Ampal. Sources in the sector estimate that Kahn is not expected to
let go of this investment.
The first question that arises in light
of Kahn’s large-scale realizations of his investments is why, in fact, is
he selling so much? The prevailing argument is that Kahn has understood that
the price of Amdocs shares reached a sufficiently high level and that it was worthwhile
selling. As a seasoned businessman who is not in love with his portfolio, he decided
to realize his investment at a high price. Another claim is, as said, that he
is simply keeping his children’s inheritance out of the reach of US inheritance
However, sources close to him say that the
main reason for the realizations is that, after 10 years at sea, Kahn is
interested in returning to live in Israel. In order to do so without the tax
authorities laying their long hands on his pocket and money, he must get rid of
all the options and shares in his possession while he is still not considered a
resident of Israel.
His income resulting from Aurec’s profits is
subject to taxes no matter what since, according to Israeli law, every person or
corporation must pay taxes on income from activity conducted in Israel, even if
he is a foreign citizen.
Tax shelter - the open sea
On the other hand, Amdocs is registered in the
island of Guernsey, which is considered a tax shelter. Incidentally, Amdocs is
not, and never was, owned by Aurec. The owners of the company are Amdocs
International, the risk-capital fund Welsh, Carson, Anderson and Stowe, and
several small investors. The company has, indeed, development centers in
Britain, the US and Israel, but the center of profit and loss is on
However, the most sophisticated tax planning
of all is that bestowed on him by his good friend, the sea. Rumor in the sector
has it that this is how things went: for years, Kahn used to stay 180 days a
year on his yacht beyond the territorial water of any state. According to the
tax laws of Israel and of 200 additional countries which are signatories to the
tax treaty, a person who is absent 180 days or more from a specific country is
exempt from paying tax on the realization of options and the sale of shares in
That being the case, Kahn’s abode at sea for
180 days a year exempts him from having to pay taxes. In such cases, it is the
custom to establish that the liable person has to pay taxes according to the
test of the center of life. That is to say, the country where taxes are to be
paid is that which is considered to be the center of the liable person’s of
Here Kahn’s secrecy enters the picture,
helping him preserve a heavy cloak of fog. In other words, no one knows where
his main residence is. He has houses in England, in the US and in Israel.
Neither would the attempt to determine his place of residence according to the
place of residence of his family be of much avail to the tax authorities. For,
his son Benjy has houses in Bermuda, in Australia and in Kfar Shmaryahu and Khan
apparently has a sister who lives in England. All this means that his center of
life may be in England, in Israel or even in Nice, France, where his yacht
anchored for several years.
Legal sources say it is believed that Kahn has
indeed reached certain compromises with the income tax authorities. However,
since he arrived at the offices of the income tax authorities in the capacity of
someone volunteering to pay taxes even though he apparently could not be bound
to do so, the sums he paid were very far from being those he would have had to
pay had be been compelled to do so.
We emphasize that there is nothing wrong with
that and Kahn is not violating any law. He is using the tax regulations to
execute tax planning, just like any company does for its workers and managers,
in an entirely legitimate fashion.
Meanwhile, the further Kahn distanced himself
from the public eye, the more people became interested in him. The further he
fled from the media, the more people wanted to interview him. In the end,
whether intentionally or not, Kahn succeeded in attracting all the attention to
himself, thus supplying an even thicker cloak of fog for his right hand man, his
confidant and business manager, Shmuel Meitar.
So, who, in fact, is Shmuel Meitar? It turns
out that Meitar has been orchestrating Kahn’s affairs for many years and holds
large parcels of shares in Amdocs, and considerable stakes in Aurum and Aurec,
over and beyond what most of the public estimates. Meitar has remained well in
the background for many years, even though he, in fact, is the force behind
Shmuel Meitar functioned, inter alia,
as the director-general of Aurec for several years. He subsequently served as
the chairman of the board of directors of Aurec and also, until 1999, as the
chairman of the board of directors of Amdocs. Meitar had decisive influence on
Amdocs’s business direction and also, eventually, apparently on the decision of
the company’s general manager, Boaz Dotan, to resign. It appears that he is, in
fact, the dominant factor in the management of Morris Kahn’s investments in
Over the years, a tight pact has developed
between Kahn and Meitar. Sources close to them ascribe this to the fact that the
two have complementary capabilities. Kahn has extensive contacts in the
international business community, a rare skill in developing relationships, and
enormous capabilities as an entrepreneur. Beyond that, Kahn is not exactly
Israeli by character. The fact of his living in a Western culture, combined with
his pleasant manner, has helped him a lot in forming his connections with
foreign companies, and especially with SBC. So that, in fact, Kahn is a
businessman in the sense of identifying opportunities and forming connections.
But he is not one of those people who know how to take an idea and turn it into
fact. Here Shmuel Meitar enters the picture.
Meitar is the one who sets business processes
into motion. He knows whether a certain idea will work in practice, or not. He
is capable of translating an idea into reality. He also knows how to identify
opportunities. He has a healthy sense of business and much ability to cause
things to happen. Even though the most aggressive initiatives have come from
Kahn, it has been Meitar who has known how to turn Kahn’s ideas into flourishing
Meitar also has the ability to find managers.
According to those close to him, Kahn is incapable of sitting opposite someone
and determining whether he will be a good manager or not. He has no
understanding in the matter. Meitar, on the other hand, can immediately identify
successful managers. So, he was also the person who chose all of the genral
managers of Aurec, Amdocs and Aurum.
Shmuel Meitar’s style of management is
characterized by cooperation, teamwork and the bestowal of full freedom of
action on the managers operating beneath him. However, this freedom of action
stops short at the painful subject of the distribution of options and shares to
workers and managers. Here, the managers’ independence is abolished and the
fighting starts. Inside sources relate that both Meitar and Kahn have agreed to
be generous about everything concerning the rewarding of workers, except when it
comes to options. In short, Meitar has never been ready even to hear of the
distribution of options to workers.
Whether Kahn relies on Meitar’s opinion in the
matter, or whether he, too, strongly opposes the distribution of options to
workers, one thing is certain: the issue of the distribution of options to
workers has never been solved; it has never even come up for discussion in
Whatever the case, Meitar and Kahn have been
working together for over 30 years now. According to the story circulating in
the hi-tech sector, the relationship between the two started when Meitar was a
law student in the late ‘60s. Golden Pages was then making its first steps and
the representatives of ITT, which then was Kahn’s partner (in Golden Pages),
arrived for a visit in Israel. Zvi Meitar, who was Kahn’s lawyer, asked Shmuel,
who was on vacation from the university right then, to take the ITT managers on
a trip in Israel.
The young Meitar acquainted the ITT
representatives with Israel and apparently, at the same time, with his business
talents. For, after returning home, the ITT managers told Kahn: “You have a
talented, sharp-minded young man here. Take him and integrate him in the
business.” Meitar did not straightway assume the position of general manager.
However, he arrived there speedily. The rest is history.
For many years now, Aurec’s number two, after
Meitar, has been its general manager, Israel (Isia) Tchetchik. Tchetchik’s first
years in Aurec were good ones for him. Aurec became Israel’s biggest
communications corporation. As it flourished, the number of companies under
Tchetchik’s management grew. Meitar and Kahn gave him their full trust, and he
enjoyed full managerial autonomy.
The falling-out started when lawyer Zvi
Meitar’s former partner, Paz Littman, became a significant factor in the
company. Littman was intended to be Aurum’s “Tchetchik,” that is, to manage it
from above. However, as time went by, deep differences between the two
Sources in the sector say that Littman is a
capital market man. He was involved in Amdocs’s IPO. His strong side is the
determining of a value for buying and selling companies. He has never actually
managed a company, certainly not complex ones like Aurec, so that his managerial
side is less strong. Moreover, Littman does not tend to involve others in his
decisions or to engage in team work. In short, Littman is a manager whose first
priority is the task, not the people.
Tchetchik, on the other hand, recognizes the
importance of human resources and is meticulous about maintaining a managerial
style characterized by teamwork, fully cooperating with the managers operating
beneath him. As a result, an unbridgeable contradiction developed between
Littman and Tchetchik. This contradiction led to Littman’s failure to understand
Tchetchik’s moves and to generally oppose them.
From Tchetchik’s point of view, the main
problem was that Littman’s influence on Meitar and Kahn steadily grew. At the
same time, the management of Aurec became increasingly complex. Sources in the
sector say that apparently the combination of Littman’s influence on the
company’s owners along with the increasing complexity of the management of
Aurec, led to the weakening of Tchetchik’s influence on Meitar and
Whatever the case, sources in the sector
firmly claim that it is not the reason for Tchetchik’s approaching retirement
from the company (expected at the end of June). They estimate that Tchetchik is
not the type of person to give up when faced with marginal problems such as
power struggles or managerial complexity. These sources say that his retirement
is a practical necessity, for the simple reason that there is nearly nothing to
manage in Aurec these days. Aurec is becoming empty of content and is expected
to cease functioning in its traditional format in the course of the year
Let us proceed from Aurec to Amdocs: Boaz
Dotan was the person who founded Amdocs and managed it until just before its
IPO. In complete opposition to Tchetchik and Meitar, Dotan was considered an
extremely dominant, centralist and autocratic manager. Sources in the sector say
that in Dotan’s time it was practically impossible to express an opinion that
contradicted his. As a result, Amdocs is a company that is currently managed in
a very centralist manner.
The background to Dotan’s leaving was,
apparently, the continuous struggle between him and Meitar regarding the
company’s future. It was actually Dotan who led the directions of Amdocs’s
development. Meitar did not really understand what they were doing there, mainly
because he never had any understanding in technology, but he did not interfere.
And then, one day, a loud slamming of the door
was heard from Amdocs’s managerial corridor, and Dotan left the company
stormily. Only a very few people in Amdocs know what was the background to that
door slamming and they refused to be interviewed. However, sources in the sector
say that Dotan was simply fed up with the incessant arguments with the board of
directors, that is, with Meitar.
Other sources say that the straw that broke
the camel’s back was Meitar’s adamant refusal to agree to the distribution of
options to workers, and this after a long period of differences of opinion
between the two regarding the company’s future and its business
Inside sources say that while Dotan looked
forward, Meitar and Kahn did not see far enough ahead. No one knows exactly what
business direction was in question. The bitter argument between Dotan and Kahn
and Meitar regarding the distribution of options to workers has been mentioned.
Add this to the fact that, except for the matter of the options, Dotan was free
to lead the company in practically any direction he wanted, and it can be
assumed that it was a combination of both these issues.
Here, another fact enters the picture: in
recent years, Amdocs started purchasing companies so as to grow. Naturally, the
acquisition of companies obligates the purchasing company to give options to the
workers of the purchased company, in exchange for the options they had prior to
So, the bottom line, after all the testimony
arriving from the various sources are put together, emerges. It can be assumed,
with great caution, that Dotan expected that at the time of the purchasing of
the companies by Amdocs, the granting of options to the purchased companies’
workers would be liable to rouse bitterness among Amdocs’s more senior workers,
who were not given options. That may be the reason why Dotan thought, as the IPO
approached, that Amdocs had to start behaving like all hi-tech companies
worldwide and give its workers options.
That being the case, sources in the sector do
not rule out the following hypothesis. Meitar and Kahn’s firm opposition to the
distribution of options put a significant limitation on Dotan regarding the
company’s future path, including, inter alia, acquisitions, the latter
being intended to lead the company to the growth necessary for continued
increase in profit per share.
Amdocs aspired to lead the market in
everything connected with the recruitment of workers and, in fact, always needed
an especially large number of workers, much more than any other hi-tech company.
So, above everything else, it can be assumed that since the options distribution
model had started to gain in popularity, it is possible that Dotan simply feared
to be left behind. He may have feared a situation in which Amdocs would have
difficulty recruiting new workers, something that would harm its
Meanwhile, the approach has changed, say
sources in the sector. After Dotan’s departure, workers started to pressure the
company on the matter of the distribution of options. Initially, before the IPO,
options were granted to some 100 of the company’s veteran and senior workers,
and some of them even received shares. The overall scope of the options and
shares for workers totaled some 3% of those held by the TOES company. The
company’s policy has changed during the last two years and, as a result,
according to sources in the sector, most of the workers nowadays receive
However, if Amdocs has distributed options to
at least some of its workers, this has not been the case with Aurec. Aurec,
indeed, is not traded, but most of the large hi-tech companies tend to
distribute phantom options. Sources in the sector say that Meitar vocabulary
does not include the phrase “employee options”, not to mention phantom options.
So, Aurec has remained aloof from the trend of distributing options to workers
and managers, with Meitar having a decisive say in this decision.
Kalmanson goes too
Sources in the sector estimate that this, too,
was the main reason for the departure of Danny Kalmanson, who was the
director-general of Aurec prior to Tchetchik. Even though the custom of granting
employee options was not yet widespread then, Kalmanson apparently demanded to
receive shares in Aurec or at least a capital-linked benefit, such as phantom
shares. When Kahn and Meitar refused, Kalmanson left. It is to be emphasized
that this is only a hypothesis and Kalmanson, who refused to be interviewed for
the article, has not confirmed it.
At any rate, the struggle over Amdocs’s future
was not the first quarrel between Dotan on one side and Meitar and Kahn on the
other. An earlier disagreement between them found expression in the company’s
prospectus, which was published before the IPO. The prospectus noted a
difference of opinion between shareholders in Amdocs International (which before
the issue held 28.5% of Amdocs Ltd., the listed company), and the minority
shareholders, who held some 18.71% of the company, regarding the rights of the
It appears that the disagreement arose due to
the demand of Amdocs’s managers (the minority shareholders) to receive
additional percentages in Amdocs International, and thus increase their holding
in Amdocs Ltd. The quarrel was over a small stake, and the parties reached a
compromise in the end. The disagreement is therefore not mentioned in the
subsequently published prospectus.
The the disagreement stems from the fact that
before the IPO, Amdocs’s managers held some 18.8% of Amdocs Ltd. (the listed
company). Of these, they held 14% directly in Amdocs Ltd., and some additional
4.8% through Amdocs International (the 18.71% of Amdocs International held by
Amdocs’s managers translates to some 4.8% of Amdocs Ltd., since Amdocs
International held some 25.8% of Amdocs Ltd. shares.)
So, prior to the IPO (and prior to the
compromise), Kahn and Meitar held some 21% of Amdocs Ltd. through Amdocs
International. As stated, Amdocs’s managers in the end received additional
stakes out of Kahn and Meitar’s portion.
According to sources in the sector, Dotan
holds by far the largest amount of shares in Amdocs, well beyond the amount held
by the company’s other managers. Those same sources estimate that Dotan’s income
deriving from the shares currently amounts to tens of millions of dollars a
After he left, Dotan founded investment
company Aria Ventures, together with Roni Tzur, formerly vice-president of Oshap
Technologies, and Shrem, Fudim, Kelner Technologies (SFKT). Aria Ventures was
recently closed due to a disagreement between the partners, because of what they
viewed as conflicts of interests between Aria and another venture capital fund
Incidentally, one of the methods that Amdocs
has adopted for the sophisticated sales of shares is the issuing of “tracking
stocks”. The shareholders have founded a trust called Traces, for selling shares
of Amdocs International. This trust facilitates a process for the selling of
shares that enables sellers to get their shares back should it turn out that the
value of a share rose above a certain threshold after the sale. A shareholder
who gets his shares back must return the amount he received for the shares
together with interest.
SBC has faith
Let us proceed from the relations inside the
group to Meitar and Kahn’s relations with their American partners. Kahn and
Meitar’s first partner was the US communications company, Southwestern Bell
(SBC). On the one hand, the SBC’s directors have always relied on Meitar with
closed eyes, something unusual for them. In every other country where the
telecommunications giant operates, it tends to be very involved in management,
watching performance closely.
On the other hand, the directors of SBC are
Americans, and as is the custom in US companies, they never deviate from the
company’s procedures. Accordingly, they demand to know exactly what the company
is doing. At the same time, as far as the substance is concerned, Meitar has
been given a free hand to operate as he wishes.
Sources in the sector say that the solid
relations between Kahn/Meitar and SBC proved themselves during the Gulf War. In
that period, many foreign companies got out of their investments in Israel or
simply stopped investing, while SBC actually made investments.
Another of Meitar and Kahn’s partners in
Amdocs is Welsh, Carson, Anderson and Stowe company. This is an investment fund
that started investing in the company for financial reasons and that behaves
like a financial partner. It is generally assumed that it has no influence on
We now reach the third Israeli partner, Zvi
Meitar. A few weeks ago, “Globes” reported that lawyer Zvi Meitar was about to
close his Israeli office and move to England, and that he intended retiring
abroad. Sources close to him say that his choice of England is not accidental,
and that there are two reasons for it. Firstly, Zvi Meitar is an anglophile and,
beyond the fact that he originates from an English-speaking country, he is in
love with English culture. His second consideration is more practical. A year’s
residence in England will also entitle Zvi Meitar to an exemption from paying
taxes in Israel while he realizes his options in Amdocs.
Successes and failures
It can be assumed that the sale of the Golden
Channels cable television company will be remembered by Aurec as one of its big
successes, even though the reason for the sale stemmed from less positive
circumstances. In the past, it was reported that the SBC directors decided to
sell their investment in the cable company because they were indignant at the
hard time that the Israeli government was giving them.
It was also reported that SBC did not
understand why it had to pay the State of Israel an additional sum of money for
the sole purpose of receiving a license to avail itself of technological
developments designed to upgrade the infrastructure that it itself had set up
out of its own pocket. Its directors viewed this as nationalization, and
demanded to meet with the then finance minister, Avraham Shochat. It was further
reported that Shochat was then visiting Washington and refused to meet with
them. The directors of SBC, which was considered the largest investor in Israel,
viewed this as a scandal and sources in the sector estimate that this was what
motivated them to sell their investments in Israel.
Other sources in the sector claim that, on the
contrary, SBC is, for the moment, less enthusiastic about selling its
investments in Israel than its business partners, Meitar and Kahn, and the fact
that it currently is Amdocs’s largest shareholder is proof of that. According to
those same sources, the person behind Meitar and Kahn’s selling their
investments in Israel is actually Meitar.
Returning to the sale of Golden Channels: it
turns out that the negotiations were relatively short and fast, and the parties
reached an agreement about the price within a few days. Opinions vary in the
industry regarding the major factor behind the success of Aurec’s managers in
selling Golden Channels at a record price at the right time. According to
prevailing opinion, there was a lot of luck involved, “but, luck is also an
important element in business.”
If Aurec had a lot of luck in selling Golden
Channels, the company’s luck turned against it in its entry into the credit card
business, Visa Alpha (the Alpha Card company). The main problem was that just
when Alpha Card entered the market, credit cards turned into a consumer good
characterized by low profit margins. In fact, Visa Alpha did not bring with it
significant added value, even though it had plenty of advantages.
According to sources in the sector, Aurec may
have here entered an area that it did not understand. After all, it was the
first time it was entering the area of financial services. At any rate, its
entry was not accidental. The idea behind it was that Aurec had to progress on
the track of financial services parallel to that of communications, and this out
of the belief that there would be synergy between the two along the
Aurec was a company that supplied
communications services, including international communications, cable
communications, and the like. It postulated that it was logical to introduce
financial services as an additional service. Its basic assumption was that a
large portion of customer service would, in the future, be virtual and be
conducted through the communications media. Aurec thus followed in the footsteps
of US companies that view micro-payments (payments in small amounts for products
and services purchased through the Internet, the telephone, and the like) as
part of their natural habitat.
In fact, the telephony companies are the only
entities capable of collecting micro-payments through their billing system,
while such a method of collection is not economically worthwhile for the credit
card companies. Therefore, Aurec perceived it as logical to combine a financial
entity with the company’s communications entities.
An additional basic assumption by Aurec was
that the banks would not forego the hundreds of millions of dollars received in
fees for the use of credit cards, which go directly to the bottom line. This
assumption turned out to be erroneous and, to Aurec’s misfortune, the banks
surprised it and waived usage charges. In the end, this relinquishment was what
broke Alpha Card.
Aurec’s general manager, Isia Tchetchik, may
have been the one who initiated the company’s entry into the field of finance.
Or, he may have simply been cooperating with the line laid down from above by
Shmuel Meitar. What is clear is that, at the time, the idea was considered as
essential for the company. True, it failed in the end, but that’s an integral
part of doing business. No one can guarantee 100% success; what really matters
is the bottom line. According to sources in the sector, that figure proves that
Tchetchik’s successes outnumber his failures.
Another company in the field of finances whose
degree of success has yet to become clear is the direct insurance company AIG.
At the moment, the company is indeed posting losses, but a relatively high
proportion of clients (some 85%) is renewing its policies from year to year.
Beyond that, sources in the sector foresee that the company will start posting
profits in non-life insurance already this year. Other sources claim that one of
the main reasons why AIG is not yet profitable is that it introduces a new line
of products every year.
Whatever the case, AIG, just like SBC, reached
Israel thanks to Morris Kahn’s charms. At the next stage, Tchetchik was the one
who prepared the way for its entry into the Israeli market.
However, the main point is that Kahn not only
brought AIG to Israel, but that he also brought it here at his own terms. Thanks
to him, AIG agreed to a different control model than the one it uses in other
countries. While AIG makes its entry into all other countries conditional on a
100% holding, it agreed to a model of joint control in Israel. So, Aurec
received 50% of the company in the end, with AIG holding the remaining
Amdocs - from telephone directories to
Amdocs was, in fact, founded by Boaz Dotan.
Dotan, who was one of the heads of the Department of Information in the Postal
Authority, established the Authority’s computing unit and, subsequently, the
first computerized database for the 144 directory inquiry service (then 14).
However, 14’s computerized system did not become functional for 10 years due to
the opposition of the workers.
At a certain stage, Tadiran received the
rights to sell the system worldwide and Dotan transferred to Tadiran. There he
recruited Amdocs’s current general manager, Avinoam Naor, and together they sold
the system to the world.
In 1967, together with US company, ITT, which
provided the financial backing, Kahn participated in a tender issued by the
Ministry of Communications for the production of Yellow Pages. ITT’s managers
expressed interest in Dotan and Naor’s system and recruited them to the company.
Several years later, Kahn purchased ITT’s shares in the company and remained its
At first, Naor and Dotan engaged in the
development of software for the telephone directory, Yellow Pages. They then
progressed to the development of billing and customer relations management
software for telephone companies. At this stage, they decided to separate the
computerization activity from Yellow Pages, and to found Amdocs.
From failed glove factory to the Aurec
Kahn has two sons, David and Benjy. The elder
son, David, is a psychologist and, according to friends, is not interested in
business. On the other hand, the younger son, Benjy, does invest in hi-tech
companies. In spite of the crisis in the Internet companies, Benjy Kahn
continues to express interest in investing in them, but only in those that
combine hardware with software. It turns out that he has many friends high up in
the venture capital industry who check investments for him privately, and not as
part of the fund’s activity. Beyond that, Benjy is involved in his father’s
affairs and serves as president of Coral World, the company that set up
Ha’aretz once reported that Kahn had
apartments in London and New York, flower plantations in South America, a 75,000
acre sheep ranch in New Zealand, and a horse ranch in Holland. He is fond of
riding, and keeps horses in Rishpon. In addition, as part of his extensive
philanthropic activity, Kahn founded the therapeutic riding club in Beit
Yehoshua with his own money.
The paper also reported that Kahn goes skiing
in France and Switzerland. After the Six-Day War, he looked into the possibility
of setting up a ski resort on Mount Hermon, but decided not to go through with
it. He likes sailing and diving, and has a magnificent yacht named “Jacqueline,”
after his wife. The yacht anchored in Nice, France, and he invites friends to go
sailing with him.
Kahn was born and grew up in South Africa, in
the town of Benoni, near Johannesburg. His father had a bicycle shop, and his
mother dealt in catering. He immigrated to Israel in the mid-1950s and founded a
leather glove factory. The factory failed and he tried to develop a patent
against car thefts. After failing in this, too, Kahn tried to manufacture
bicycles and lost a fortune. At a certain stage, he invested in a cattle ranch.
This business, too, failed after the cattle were stolen.
Kahn does not have a university degree. His
academic history comprises one year’s study of political science at the
University of Johannesburg. During that year, Kahn was active in leftist circles
but, taking into account his present-day vehement opposition to the distribution
of options and shares to workers, it was apparently a passing stage. After
immigrating to Israel with his family, Kahn purchased a house in the moshav,
Beit Yanai, where his family still lives.
Kahn started investing in underwater
observatories in the 1970s, after he damaged an eardrum while diving and he was
afraid he would not be able to dive any more. The underwater observatory in
Eilat was established in collaboration with Bank Hapoalim’s Ampal
Since then, Kahn has been involved in
additional business enterprises. But his big business break-through occurred in
the mid-1980s, after he established the Aurec group from Golden
Published by Israel's
Business Arena on 26 June, 2001