Grapevine: King David Hotel chronicles

The country's oldest hotel is once again the subject of a legal dispute.

The King David Hotel (photo credit: WIKIMEDIA COMMONS/DANNY LYULEV)
The King David Hotel
JERUSALEM'S OLDEST luxury hotel, the King David – the flagship of the Dan Hotel chain – is once again the subject of a legal dispute, according to Calcalist, the financial supplement of Yediot Aharonot.
The Dan chain itself is not a party to the dispute. The claim for dividends and proceeds of sale dating back more than 67 years is against the State Custodian. The initial claim was supposedly filed in the Jerusalem District Court in June 2007 by Jaser Asraf, a lawyer from Baka al-Gharbiya acting on behalf of the National Bank of Egypt.
An interesting sideline to the story is that the NBE, when it was founded in 1898, was primarily in the hands of Jewish bankers living in London. Sir Ernest Cassel owned 50 percent of the shares, and Sir Isaac Suares, together with his brothers Joseph and Felix, owned 25%. The owner of the remaining 25% was Constantine Salvagos, a member of Alexandria’s affluent Greek community.
Thirty-one years later, Palestine Hotels Ltd. was registered in Jerusalem. Egyptian Hotels Ltd. formed it in conjunction with other financial groups and individuals – most of them Jewish – from Egypt, the United States and England. Egyptian Jewish banker Albert Mossari, who was then the director of the NBE, financed almost half the cost of the construction of the hotel, located on what was then known as Julian’s Way. Some 46% of the construction costs came from wealthy Cairo Jews. The hotel opened for business in 1931. The bank claims to have subsequently purchased an additional 693 shares.
Following the establishment of the State of Israel, the street was renamed King David Street. Mossari sold his personal shares in the hotel, but the NBE retained the shares the bank had purchased. In view of the hostilities between Israel and Egypt at the time, the NBE was regarded as an absentee owner whose property was taken over by the State Custodian.
In 1957, the Federmann family, founders of the Dan chain, purchased the King David. In 1993, the State Custodian sold the NBE shares to private investors.
When the bank decided to sue and hired Asraf to represent it, the claim was for $78 million. Asraf charged astronomical fees for his services, but it later transpired that he had not filed a claim in court and that he was basically a con artist. He was subsequently convicted of defrauding the NBE and Banque Misr, which also held stock in the hotel. He had cheated the banks out of NIS 21m.
The NBE made its first effort with regard to the King David in 2007, following an Egyptian court order that the Cecil Hotel in Alexandria be returned to its Jewish owners, the Metzger family from the UK.
The NBE says it was never paid any interest on its shares, nor did it receive the proceeds from the sale of those shares. This time around, the bank is being represented by Tel Aviv-based lawyers Ron Yeshayahu and Gil Makov.
PRIOR TO hosting an Iftar dinner for Arab notables on Sunday, President Reuven Rivlin held a briefing with journalists who report for the Arabic-language media. When they asked his opinion about two states and dividing Jerusalem so that the Arab section would become the capital of Palestine, Rivlin was reluctant to give them a direct reply. In the final analysis, he said that in a democracy, his personal opinion was irrelevant. But he did remark that the Palestinians had long ago realized that if they had a state, its capital would be in Abu Dis – part of the autonomous Palestinian Authority territory bordering Jerusalem.
Rivlin said that he had always dreamed of a united Jerusalem and that when he’d served on the Jerusalem City Council, he had frequently told then-mayor Teddy Kollek that it was a mistake to attempt to get the Palestinians living in refugee camps to try and improve their lifestyle. What should have been done, he said on Sunday, was to build new houses for them in Jerusalem, then simply evacuate them from the refugee camps and relocate them to their new modern homes.
What he didn’t say was that he had been one of the soldiers in the Six Day War who had helped to liberate the Old City and unify Jerusalem.