Think About It: The fall of Nochi Danker
Unless a miracle occurs and Dankner manages to find an investor, all one can do is hope the process is controlled.
Part of the pyramid controlled by Nochi Dankner's Photo: REUTERS/Amir Cohen
I am no great fan of tycoons – especially the variety who did not start off as
manufacturers of some tangible product (like industrial cutting tools, or cut
diamonds) or providers of professional services (like hotels or shipping) in
which they gained expertise, and whose business empires are based on
over-leveraged financial pyramids.
From the very start of his rise in the
business world Nochi Dankner was one of those who rubbed me the wrong way, and
from whose shares and bonds I avoided like a house on fire, though unfortunately
those who invested the money in my providence and advanced study funds were
apparently not as vigilant.
Dankner is probably the most wholesome
looking of tycoons. Unlike some of the other tycoons he also doesn’t try to
impose his spiritual or religious beliefs (whatever they might be) on our
children, by financing “enrichment classes” at their schools.
has what looks like a permanent smirk on his face that projects an aura of
arrogance, and one gets the feeling that if there is anything really worth
knowing about the man, beyond facts and figures about his business empire, these
are locked in some safe.
Of the few facts we do know about Dankner,
however, are that he enjoys distributing large checks to projects in local
authorities, and to “holy men” such as Rabbi Yaakov Ifargan (“the Xray”) and
Rabbi Yoshiyahu Yosef Pinto, who he apparently also consults, in some form or
other, regarding his business ventures.
THERE IS, of course, nothing
wrong with giving charity to those in need, but when this is done in front of
cameras, the source of the money is corporate rather than private, and the
objects of the charity are frequently projects for which the state ought to be
responsible (that is, if Israel were a well-ordered state with a social
conscience and some social vision), then one cannot avoid asking the question
how the gvir of the Jewish shtetl has re-emerged in the sovereign State of
Israel in the form of Nochi Dankner and his ilk.
The real tragedy is that
most of the citizens of this country do not seem to mind this return to the
shtetl, and are oblivious to the fact that modern Zionism was a revolt against
the traditional Jewish way of life in Eastern Europe, before the Holocaust
caused the total destruction of the latter, turning it into something to be
remembered with longing.
As to the rabbis, everyone, including gentlemen
who do not wear a skullcap or visit a synagogue on a regular basis, can finance
or consult any rabbi they please. However, when the money being donated and the
advice being requested affect the pockets of third parties, many of whom view
men like Ifargan and Pinto as little more than impostors and charlatans, who
offer miracle cures and hope to the simpleminded, who have stopped expecting the
state to come to their assistance – then there is a problem.
All this is
much more disturbing now that the flagship of Dankner’s financial empire, IDB
Holdings, has had “a going-concern warning” attached to it.
some say about this recent development. “Sheer arrogance,” others point out –
especially those who all along analyzed Dankner’s purchases, such as land in Las
Vegas to construct a grand hotel together with Yitzhak Tshuva in 2007, shares of
Credit Suisse in 2008-2010 and the Ma’ariv daily in 2011, and concluded that the
man is a reckless gambler, lacking any real understanding of the intricacies of
the business world.
Furthermore, for quite a while now the danger of the
over-leveraged financial pyramids has been of major concern and debate in the
media, the Finance Ministry and the Knesset.
Dankner and the other tycoons, who sent hordes of lobbyists to the Knesset to
try and prevent moves to force them to dismantle their pyramids – unfortunately
with some measure of success.
In Dankner’s case this approach was quite
in line with what those close to him say about him: that he is an incurable
optimist, who is inclined to turn a deaf ear to people who differ with him about
his assessment of the situation.
In Dankner’s favor one must say that he
is determined to do everything possible to avoid a debt settlement involving
what is known in financial jargon as a “haircut,” which would involve major
losses to the owners of the debt.
Other tycoons, who have got into
similar financial straits, appear to have accommodated themselves to “haircuts”
without as much as a wink, though some – like Lev Leviev – have simply lowered
their profile, and disappeared from our TV screens.
Unless a miracle
occurs and Dankner manages to find someone to invest in his empire, and save it
from collapse, all one can do is hope that the process will be as controlled as
possible, and the losses as small as possible.
Experts agree that Dankner
himself should not be involved in this process, since he does not possess the
appropriate personal qualifications and experience to perform it
He should concentrate on reverting to his natural size, and
proceeding from there. The motto “walk humbly” (Micah 6:8), would also serve him
well, but that is apparently not part of the advice that the holy men
The writer teaches at the Max Stern Yezreel Valley College and
was a Knesset employee for many years.