El Al's lawyer petitions gov't over identity of new majority stakeholder
El Al's new owner, 26-years-old Eli Rozenberg, challenged after buying NIS 359 million worth of stock: Prove you're the real owner, or the airline's license might be revoked.
By HAGAY HACOHENEl Al Israel Airlines planes are seen on the tarmac at Ben Gurion International airport in Lod, near Tel Aviv, Israel March 10, 2020.(photo credit: REUTERS/RONEN ZEVULUN)El Al is trying to torpedo the takeover of the company by the 26-year-old Eli Rozenberg, who succeeded in becoming the majority stakeholder in last week’s $150 million public offering.In a letter sent on Thursday by El Al’s lawyer Avigdor Klagsbald to Transportation Minister Miri Regev, Defense Minister Benny Gantz, and Communications Minister Dudi Amsalem the company argued that the yeshiva student is acting as a front for his father, US businessman Kenny Rozenberg. If true, this could be a violation of the requirement that the national airline be owned by an Israeli citizen.The authorities must approve handing over control of the airline to the younger Rozenberg via his company, Kanfei Nesharim (Eagles’ Wings).The attorney argued in the letter that the elder Rozenberg is the real owner behind his son, and that the usage of the young man is a “false facade” meant to bypass Israeli law. While the young Rozenberg is an Israeli citizen, he claimed in the letter, his address in official records is still an American one.The letter arrives after the younger Rozenberg purchased 42.9% of El Al’s stocks for NIS 359 million ($103m.). During the same sale, the state of Israel bought 14% of the stocks for the sum of NIS 115 m. ($33m.). The previous controllers of the company, vice-chairwoman Tami Mozes-Borovitz and her husband Oded Borovitz, did not buy a single stock, The Marker reported on Thursday.The sale was needed to cover the airline’s considerable losses, which it took on during the unexpected halt in air travel it has suffered during the coronavirus pandemic.Regev publicly vowed to save the airline, which is partly why the state made the decision to buy shares in it.Klagsbald accused the elder Rozenberg of having a record of presenting false data in his other American dealings. He wrote that Centers Plan for Healthy Living (CPHL), a New York-based nursing home chain he owns, agreed to pay $1.65m. to US authorities two years ago after it was alleged that the company filed false claims to defraud the State of New York.The letter includes the claim that the Israeli firm representing the younger Rozenberg was fully aware it was using him as a front and didn’t even know his true age, believing him to be 19 years of age and not 26.“Knafaim [the previous owners of El Al] did not take kindly to this trick” the lawyer wrote in his letter, “and so ended all dealings.” The letter also includes the claim that the money used to buy the stocks was a present from the elder Rozenberg to his son and that, should more money be needed, the father will provide it, not his son, the alleged owner of the airline.Klagsbald requested an urgent meeting with the ministers being addressed, warning that the airline will not be able to operate if owned by a foreign national against Israeli law.
