Welcome, Guest! - or
Easy to remember!  »  VinNews.com

Jerusalem - Israeli Billionaire Faces Money Woes

Published on: September 3, 2012 02:01 PM
By: AP
Change text size Text Size  
Bookmark and Share
FILE -  In this Sunday, July 1, 2012 file  photo, Israeli businessman Nochi Dankner, sits at the annual gathering of the rabbi's followers and supporters in the town of  Netivot, southern Israel. One of Israel's wealthiest businessmen may quickly be going from riches to rags. Dankner, the blue-eyed darling of Israel's business community who is often credited with helping rescue Israel's economy at the height of the violence of the Palestinian uprising, is now struggling to keep his mammoth holding company above board. (AP Photo/Tsafrir Abayov, File)FILE -  In this Sunday, July 1, 2012 file photo, Israeli businessman Nochi Dankner, sits at the annual gathering of the rabbi's followers and supporters in the town of Netivot, southern Israel. One of Israel's wealthiest businessmen may quickly be going from riches to rags. Dankner, the blue-eyed darling of Israel's business community who is often credited with helping rescue Israel's economy at the height of the violence of the Palestinian uprising, is now struggling to keep his mammoth holding company above board. (AP Photo/Tsafrir Abayov, File)

Jerusalem - One of Israel’s wealthiest businessmen may quickly be going from riches to rags, and experts warn he could drag Israel’s economy down with him.

Advertisement:

Nochi Dankner, a favorite of Israel’s business community who is often credited with helping rescue Israel’s economy at the height of a Palestinian uprising, is struggling to keep his mammoth holding company above water.

IDB Holding Corp., which controls a large piece of the Israeli economic pie — a large cellphone company, a major supermarket chain, an insurance company and a cement producer monopoly, among other concerns — announced over the weekend that it may not be able to pay tens of millions of dollars of debts in the coming year.

The plight of Dankner has raised concern that his bondholders could lose on their investments and Israelis could see their retirement funds, heavily exposed to IDB investments, in danger.

“We are now going through difficult times. It’s not easy for any of us,” Dankner began a letter to employees last weekend.

Israel’s finance minister, Yuval Steinitz, sought to douse the flames, estimating a “less than one in a thousand” chance that Israeli citizens’ pensions would be affected.

Economists forecast a much gloomier picture should Dankner’s company founder. Because so much of Israel’s economy is controlled by Dankner’s holding company, Israel is in more danger than the U.S. economy was in during the credit crisis of the late 2000s, said Daniel Doron, director of the Israel Center for Social and Economic Progress.

“It’s a domino effect,” said Doron. “Creditors would lose money. A lot of people would lose jobs. It would be a great tragedy.”

The 58-year-old billionaire’s downturn has come swiftly.

Born to an aristocratic Israeli family with a powerful investment firm, Dankner made a mark in 1999 when he sold his shares in the firm to his relatives for $100 million.

His timing was right. A year later, a Palestinian uprising erupted, paralyzing Israel’s economy and causing the shares in his family’s business to tank.

At the height of the uprising, Dankner and his partners borrowed millions of dollars from Israeli banks and bought IDB Holding Corp.

“No one understood who would buy during the crisis ... it was a deal that amazed everyone,” said Stella Korin Lieber, a commentator at the Globes financial newspaper. “He signaled the end of the crisis.”

Under Dankner’s leadership, IDB became Israel’s largest holding company, and Dankner became a celebrity. Last year, he garnered 11th place on Forbes Magazine’s ranking of wealthy Israelis. He was known to travel in a private jet and to lunch with his longtime friend, Prime Minister Benjamin Netanyahu.

His public image was as a handsome, mild-mannered man with a spiritual side, traveling to Nepal to study Buddhism and forging a close relationship with a Kabbalistic healer in Israel known as the “X-ray Rabbi.”

In 2006, as rockets rained down on northern Israel during its war with Hezbollah in Lebanon, Dankner visited Israelis in bomb shelters and donated large sums for their welfare.

Then he became overconfident, Korin Lieber said.

In 2007, he and another Israeli billionaire invested in plans to build a Las Vegas casino when U.S. real estate prices were at their peak, and the project quickly tanked. From 2008-2010, a Dankner subsidiary bought shares in the Swiss multinational bank Credit Suisse, but last year lost millions of dollars in the deal. He also bought Maariv, an unprofitable Israeli daily newspaper, in what was seen as more of an ego trip than a smart business decision.

Then last summer, hundreds of thousands of Israelis took to the streets to protest the country’s high cost of living.

Dankner’s picture was plastered on protesters’ posters — one of many business tycoons accused of monopolizing much of the Israeli market, keeping prices high.

Food prices came down, the government facilitated more cellphone companies to enter the market, and Dankner’s supermarket chain and mobile phone company suffered losses.

“He didn’t pay attention to the changes that were taking place in the business world,” Korin Lieber said. “He had a lot of arrogance and conviction — ‘we will be fine.’”

Dankner has vowed to meet an $8.8 million payment to one group of bondholders this week. The company owes about $425 million to bondholders and $75 million to Israeli banks, Israel’s Haaretz daily reported. IDB Holding Corp. is asking for more time to find another investor for the company.

At a meeting of bondholders Monday, one bondholder told Israel’s Channel 10 TV that Dankner should dip into in his own wealth to repay his debts.


More of today's headlines

Vienna - A Jewish organization monitoring anti-Semitic incidents worldwide says it has written Austria's interior ministry to complain that police ignored a rabbi's plea... Fort Lauderdale, FL - The mysterious disappearance of Fort Lauderdale millionaire Guma Aguiar, 35, became even more curious after United States Coast Guard search and...

 

Total14

Read Comments (14)  —  Post Yours »

1

 Sep 03, 2012 at 03:01 PM TheRealJoe123 Says:

Certain super rich people do and can have a serious affect on a nations economy however its crazy how people especially frum people invest money that they don't have in these companies at most you should put 5% of your money in a single company.

2

 Sep 03, 2012 at 04:36 PM Benny Says:

How about learing idishkeit first in your own country?
Who needs avoda zora in Nepal?
I hope Hashem will lead you in right way
(Because sounds that you have a good heart towards your brothers jews)

3

 Sep 03, 2012 at 05:04 PM Zaydie Perry Says:

This proves that no one has a guarantee. Sometimes the best investment strategy can go haywire. Dankner is probably heavily leveraged in a financial market that's becoming increasingly volatile; and now he's drowning in overwhelming debt. Some investors in these situations may be able to tread water until help arrives; but others find themsleves in a continuing downward spiral. Unfortunately they may drag too many others down with them.

4

 Sep 03, 2012 at 05:54 PM Wise-Guy Says:

Reply to #2  
Benny Says:

How about learing idishkeit first in your own country?
Who needs avoda zora in Nepal?
I hope Hashem will lead you in right way
(Because sounds that you have a good heart towards your brothers jews)

Hey buddy, be careful!
Comments like these can get you a barrage of criticism and accusations around here.
Trust me, I know from experience.

Be prepared to being labeled: Judgmental, arrogant, callous, insensitive, tactless, vile, crude, mean-spirited, narrow-minded, etc. etc.

The people that call you these names are all very "enlightened" and NOT at all any of the above...

Just givin' ya some friendly advice.

5

 Sep 03, 2012 at 06:10 PM cool masmid Says:

He has money woes???.....welcome to the club. The only difference is that despite his money woes he will still continue living the good life... the same cannot be said with regards to most of us.....

6

 Sep 03, 2012 at 08:11 PM Anonymous Says:

Reply to #2  
Benny Says:

How about learing idishkeit first in your own country?
Who needs avoda zora in Nepal?
I hope Hashem will lead you in right way
(Because sounds that you have a good heart towards your brothers jews)

"Who needs avoda zora in Nepal?"

Actually, you do. Your intolerance would benefit greatly from some of the Buddhist teachings, which have much in common with Kabbalah and daas torah, as they relate to encouraging everyone to discover in their inner self and spiritual strength. Dankner is a big baal tzadadkah and an ehrliche yid. He broadens his frame of reference to learn about all cultures and does not live in some little intellectual shteitel.

7

 Sep 03, 2012 at 10:14 PM esther Says:

Reply to #6  
Anonymous Says:

"Who needs avoda zora in Nepal?"

Actually, you do. Your intolerance would benefit greatly from some of the Buddhist teachings, which have much in common with Kabbalah and daas torah, as they relate to encouraging everyone to discover in their inner self and spiritual strength. Dankner is a big baal tzadadkah and an ehrliche yid. He broadens his frame of reference to learn about all cultures and does not live in some little intellectual shteitel.

wherever yu're coming from,yu couldn't be more dangerously wrong.fyi,avodah zara is one of the 3 cardinal sins for which a yid should let himself be killed rather than commit. it has a destructive effect on the jewish soul and one should take great lengths to distance himself.

8

 Sep 03, 2012 at 11:57 PM SamEiger Says:

Reply to #4  
Wise-Guy Says:

Hey buddy, be careful!
Comments like these can get you a barrage of criticism and accusations around here.
Trust me, I know from experience.

Be prepared to being labeled: Judgmental, arrogant, callous, insensitive, tactless, vile, crude, mean-spirited, narrow-minded, etc. etc.

The people that call you these names are all very "enlightened" and NOT at all any of the above...

Just givin' ya some friendly advice.

Good call #4 (see #6). Of course we are all so narrow minded to think badly of someone going to study Buddhism!

9

 Sep 04, 2012 at 02:11 AM haltkup Says:

Reply to #6  
Anonymous Says:

"Who needs avoda zora in Nepal?"

Actually, you do. Your intolerance would benefit greatly from some of the Buddhist teachings, which have much in common with Kabbalah and daas torah, as they relate to encouraging everyone to discover in their inner self and spiritual strength. Dankner is a big baal tzadadkah and an ehrliche yid. He broadens his frame of reference to learn about all cultures and does not live in some little intellectual shteitel.

you know nothing of daas torah

10

 Sep 04, 2012 at 02:15 AM Faith Says:

Hamokem Yemaley chisronoch!!!!

11

 Sep 04, 2012 at 07:24 AM The-Macher Says:

It is as I have known for years, since the bubble in EY began. The bust is coming, and it is coming big time. Be prepared to welcome a large influx of economic refugees from EY, and do it right so they will live as Jews rather than living as "Israelis abroad."

12

 Sep 04, 2012 at 09:33 AM Sarak Says:

a jew is a jew, there are not many jews left on the planet, according to most its 13.5million total, so we must all respect each other and treat each other nice, as it seems everyone else is finding an excuse to hate us.

This man did lots of good, hes going thru some bad times now, we should pray for his companies as they employ many jews.

The idea that you are more jew than the next guy because yoou have longer payos or that you wear rabine tam gatches is rediculious, remember up until 300 or so years ago jews didnt look like hassidum looked today, only that rabbi looked the part.

its almost yum kippur, be open minded, accept all jews

13

 Sep 05, 2012 at 04:18 PM neezoogshoin Says:

Reply to #6  
Anonymous Says:

"Who needs avoda zora in Nepal?"

Actually, you do. Your intolerance would benefit greatly from some of the Buddhist teachings, which have much in common with Kabbalah and daas torah, as they relate to encouraging everyone to discover in their inner self and spiritual strength. Dankner is a big baal tzadadkah and an ehrliche yid. He broadens his frame of reference to learn about all cultures and does not live in some little intellectual shteitel.

Yes, we can even open an open-minded Buddhism school and call it Mendelsohn's Yeshiva. We would all greatly benefit from that.

14

 Sep 05, 2012 at 04:41 PM ActualJew Says:

sounds like he is a good man who might not have realized that his fellow men were suffering from the monopolistic practices that were common in Israel up until recently and are still somewhat there.
hope he recovers but keeps his eyes open.

15

Sign-in to post a comment

Scroll Up
Advertisements:

Sell your scrap gold and broken jewelry and earn hard cash sell gold today!