Yitzhak Tshuva turned into an unflattering symbol this week. Like Zehavit Cohen and Ilan Ben-Dov before him, he has become a symbol of arrogance, pride, greed, and shirking of his commitments. It ended badly for Cohen, Ben-Dov has become the man that we all love to hate, and the question is whether Tshuva is going the same way. Once this would have bothered him; but now it seems that he could not care less about the criticism.
Once upon a time, things were different. Tshuva was the contractor from Netanya, the people's tycoon, the businessman who built his empire with his own hands - a real Horatio Alger. Tshuva carefully fostered his popular image; when he found natural gas, he dedicated it to the nation and the Zionist dream. He talked about education, and repeatedly reiterated his tough childhood.
The image was first tarnished four years ago, when he relaunched New York's Plaza hotel in an extravagant event backed by an obsequious media - the same media that this week turned mercilessly against him. Let us not expand the discussion to the lavish wedding of Tshuva's son, Elad, an event that speaks for itself. After all, a man has the right to give his son's hand in marriage at a cost of NIS 7 million. A man has the right to display his wealth to the envious masses.
En route, there was the Sheshinski committee, where Tshuva was shown to be power-hungry and self-centered. He was fighting for his billions of dollars in potential natural gas, and was utterly contemptuous of the state's wish to give its citizens part of this rare natural treasure.
"Agreements must be honored," Tshuva said at the time, and supported by a slew of hired lawyers, media advisors, and academics. "Damaging property rights"; "agreements must not be changed retroactively". These were the mantras. The opponents of the Sheshinski committee did not refrain from personally attacking Minister of Finance Yuval Steinitz and committee chairman Prof. Eytan Sheshinski.
And now comes the debt settlement at Delek Real Estate Ltd. (TASE: DLKR) and Tshuva does not understand the problem. Although a year ago he told the Sheshinski committee that agreements must be honored, but Delek Real Estate's bonds are an agreement between the company and its bondholders, and what has this to do with him? After all, he is a separate legal entity. Why should the bondholders expect the man who owns 51% of the company to bear all its debts? When the company issued the debts, he did not control it; Delek Real Estate was a subsidiary of Delek Group Ltd. (TASE: DLEKG), in which Tshuva owns 64%, but which is another separate legal entity. These days, entire countries are writing off debts.
In general, Tshuva feels that has done even more than can be expected. He has injected hundreds of millions of shekels into Delek Real Estate in the past few years, and he is now prepared to inject NIS 250 million more. So what do people want of him? The people who bought the bonds took a risk and lost NIS 2.2 billion. Stuff happens.
Legally, Tshuva is right. But the conduct of Delek Real Estate is costing him whatever public support he had left after the Sheshinski committee and may be why he has hidden himself from the media. In contrast to Lev Leviev, who stood erect at press conferences and spoke courageously about the problems at Africa-Israel Investments Ltd. (TASE:AFIL), or even Ben-Dov, who has given his version of events, Tshuva is silent. He is not speaking, not giving interviews, not responding. He has sent out his emissaries to the front and remained in the rear.
Will Tshuva pay a price for shrugging off Delek Real Estate? He apparently does not think so. He is betting on the public's short memory and indifference of the financial institutions. He is betting that hostile public opinion will not harm him, and that the public which today sees him as a cold tycoon will be quick to forgive and forget the day after. Most of all, Tshuva is betting that the next time that Delek turns up in the debt market to offer billions of shekels in bonds to finance natural gas wells, the institutions will stand in line to buy. He is probably right.
Published by Globes [online], Israel business news - www.globes-online.com - on November 24, 2011
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