Rozenberg: El Al board not pursuing airline's aims

El Al and Eli Rozenberg / Photo: Yoav Yaari

Eli Rozenberg asks why the El Al board is still backing the Borovitz Group, even though it did not invest a penny in last week's public offering.

Eli Rozenberg has reacted angrily to the demand by El Al Israel Airlines Ltd. (TASE: ELAL) that he should not be allowed to take control of the airline because he is a 'straw man' acting on behalf of his father businessman Kenny Rozenberg. A letter sent to the El Al board by Eli Rozenberg's lawyers Advs. Adi Zaltzman and Joseph Benkel of Shibolet law firm has asked why the El Al board is still backing the Borovitz Group and charged that the board is not working in the best interests of the airline.

The letter said, "Every additional delay in transferring control of El Al to Kanfei Nesharim Aviation (Rozenberg's holding company), will damage with utter certainty, El Al, its shareholders, creditors, employees and its customers, and might jeopardize the stability of the company and even bring about its collapse."

"While control in El Al is not transferred to Kanfei Nesharim, which invested more than NIS 360 million in the company, it will not be able to complete the government's plan including the loan backed by the State."

Rozenberg, 26, invested $107 million in last week's $150 million public offering by El Al, giving him a 43% controlling stake. But the El Al board is asking the three ministers who now need to approve the transfer of control to Rozenberg - Minister of Defense Benny Gantz, Minister of Transport Miri Regev, and Minister of Cyber and Digital Matters David Amsalem - to reconsider permitting him to take control because they claim he has bought the shares with his father's money. The El Al board adds that Eli Rozenberg has no business experience and describes Kenny Rozenberg's business background as 'problematic.'

Rozenberg's lawyers wrote, "It seems that the Borovitz Group (controlling shareholders in El Al parent company Knafaim) is making illegal use of the name of El Al for its aims which are not the same as El Al's aims."

Rozenberg's lawyers described the letter sent by El Al asking the ministers not to approve the transfer of control as, "a letter containing lies and for which the transparent and only intention is to destroy, disrupt, and delay the transfer of control in El Al to Kanfei Nesharim Aviation ……. The letter is designed only to put pressure, illegally, and against the law's instructions, and keep control in the hands of Knafaim Holdings."

"Knafaim and its controlling owners abstained from investing not even a single penny in El Al as part of the public offering and you the board of directors - continue to back control by Knafaim and its controlling shareholders for the 'benefit of El Al.'"

Kanfei Nesharim charges that on September 16, "The control permit given to the Borovitz Group expired and since that day El Al has been managed without an owner according to the legal permit."

Advs. Zaltzman and Benkel argue that some members of the board are making cynical use of their formal authority, have a clear conflict of interest and are using the large amount of money invested by Eli Rozenberg, the State and the public to try and perpetuate the control of the Borovitz Group.

Reading between the lines of the letter, the lawyers are threatening personal lawsuits for El Al directors for failing to perform their role.

Published by Globes, Israel business news - en.globes.co.il - on September 25, 2020

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

El Al and Eli Rozenberg / Photo: Yoav Yaari
El Al and Eli Rozenberg / Photo: Yoav Yaari
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