Gov't to permit Eli Rozenberg to control El Al

El Al

Despite objections from the El Al board that Rozenberg is not fit to control the airline, the Government Companies Authority will approve him as controlling shareholder.

Eli Rozenberg's company Kanfei Nesharim Aviation will receive a permit to control El Al Israel Airlines Ltd. (TASE: ELAL) from the Israel government despite opposition from the airline's current board of directors and controlling shareholder, sources close to the matter have informed "Globes."

Earlier this month Rozenberg's company bought a 43% stake in the airline for a little over $100 million in El Al's $150 million public offering on the Tel Aviv Stock Exchange (TASE). Rozenberg is expected to soon receive a permit from the Government Companies Authority to control the airline subject to approval from Minister of Defense Benny Gantz, Minister of Transport Miri Regev and Minister of Cyber and Digital Matters David Amsalem.

The three ministers received a letter last week from the current El Al board of directors insisting that Eli Rozenberg, a 26 year old Jerusalem resident who immigrated to Israel several years ago, was a 'straw man' for his father, the US based businessman Kenny Rozenberg, and should therefore not be allowed to control the airline.

Since first expressing interest in buying control of El Al, Eli Rozenberg has been surrounded by an entourage of senior Israeli advisors including Reem Aminoach, the founder of one of Israel's biggest accounting firms. Eli Rozenberg for his part remains shrouded in mystery. He has not spoken to the media and all that has been seen of him is a small blurred image published a month ago. Some of the advisors he has hired have yet to meet him.

The El Al board also argued that Rozenberg is "a young man without business experience who is trying to create a false impression as if he is the controlling shareholder because he is apparently an Israeli resident." Under the terms of the Israeli government's golden share in El Al, the controlling shareholder must be an Israeli resident.

In response a letter sent to the El Al board by Eli Rozenberg's lawyers Advs. Adi Zaltzman and Joseph Benkel of Shibolet law firm asked why the El Al board was still backing the Borovitz Group even though they had npot invested a penny in the airline in the recent public offering, and charged that the board was not working in the best interests of the airline and behaving illegally.

In a pre-ruling given to Eli Rozenberg, he was told by the Government Companies Authority that he fit the criteria for El Al's controlling shareholder. Furthermore, the complaints about Rozenberg and his father voiced in last week's letter were already sent and known to the Government Companies Authority before the public offering.

Published by Globes, Israel business news - en.globes.co.il - on September 29, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

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