Businessman David Appel, who two years ago finished a prison term for bribery and fraud, wants to return to an active role in the urban renewal project in the Giora neighborhood in Givat Shmuel he won in a 1990s tender, sources inform "Globes." The crimes of which Appel was convicted were related to winning this tender.
In 2011, a court approved a creditors arrangement confirming developer Moshe Aharoni as the purchaser of the rights of Migdal Hazohar, a company owned by Appel that had been under a stay of proceedings. Aharoni paid NIS 330 million for the rights, NIS 235 million of which was for land in Givat Shmuel on which Aharoni is currently building a residential housing project in cooperation with Africa-Israel Investments Ltd. (TASE:AFIL). The remainder was for purchasing additional rights of Migdal Hazohar, whose main asset is the rights in the urban renewal project.
The agreement signed with Aharoni was contingent, among other things, on the Israel Land Authority (ILA) renewing the tender won by Appel. ILA sent Aharoni a letter confirming that it was positively considering carrying out the tender and increasing the construction rights in the project. The ILA later rescinded its support for the project, however, claiming that it was having difficulty implementing a tender in which criminal proceedings were involved, and left the matter for the court to decide.
Since then, Aharoni has been in discussions with ILA concerning an agreement about the Givat Shmuel project and rights in other Migdal Hazohar assets. In this context Aharoni also invested money in addition to the millions of shekels deposited with Adv. Erez Haver, the special director of Migdal Hazohar.
At the height of the negotiations between the parties, a new bid to acquire the Migdal Hazohar rights was unexpectedly submitted by a company registered in Cyprus named Herbert Samuel on the Sea, whose advisor is none other than Appel. Aharoni, through Adv. Ronen Matry, asserted that the creditors arrangement signed with him was valid and binding, and that the bid submitted by Herbert Samuel on the Sea was no higher than Aharoni's bid, which had already been approved in 2012.
As part of the legal proceedings, which reached the Supreme Court, it was ruled that the court wanted to hear the views on the matter of the company's creditors. Next Sunday, the company's main creditor, the Israel Tax Authority, will convene in order to decide the matter and submit its position to the court.
The residents of the Giora neighborhood, who have been waiting for many years for the completion of the project in the dilapidated neighborhood because of the criminal proceedings linked to it, and who had hoped for progress with Aharoni, have expressed concern about the new developments. "A legal proceeding has been going on for 25 years, and during this time the neighborhood has been crumbling and the residents have been dying," Giora neighborhood residents committee chairman Nir Atia told "Globes." "This is a well-known poor neighborhood in Givat Shmuel, and the little man in being trampled again, with no justice. I regret that the Migdal Hazohar liquidator, apparently for his own reasons, is not taking action to close the case, and is introducing other parties into an equation that should have been resolved long ago."
Published by Globes [online], Israel business news - www.globes-online.com - on May 5, 2016
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