Flies on the Wall, Finance Ministers, and Reshet

The Banker: Mr Finance Minister, you can't imagine how much damage it would do to us.

Minister: The capital markets supervisor at the treasury told me the reform would hugely benefit consumers. I am determined to see it through.

Banker: These paper-pushers don't understand a thing. We hold economic opinions from the likes of Swary, Barnea and Sheinin, all leading lights of Israeli economics, who say the government mustn't intervene in the present state of the market.

Minister: My decision is final. You know I'm committed to the reform, for the sake of consumers. Have a good day. This meeting is over.

Banker (retreating to the door): It went better for us with your son. He's much nicer than you.

Minister: I shall ignore that comment. You know we have Chinese walls at home. What Ofer does with bankers or businessmen is not my affair.

Banker: Of course, of course, we also have Chinese walls. But you know how they work.

Minister: Ofer is a separate entity. He is a businessman by his own right. He's not a child.

Banker: We know that, of course, he's a wonderful businessman, that's why we bet so much money on him. You know we lent more than NIS 100 million to companies he controls. Two years ago it became evident that there was basically no chance he would repay on time, interest and principal. But we believe he is a great guy and that ultimately we'll get our money back.

Minister: Have a good day (pushes the Banker through the door).

Banker (muffled, from behind the door): "Okay, send my regards."

The minister remains alone in the room, lost in thought.

That dialog is a figment of my imagination. Avraham Hirchson has not yet been named finance minister, and in any case there is zero chance that if he gets the job, bankers will start pestering him about the sorry situation of his son.

Hirchson's position that he and his son are entirely different entities is perfectly legitimate, under normal circumstances. A father should not be disqualified for office because of his son, and the son shouldn't care what his father does.

But when Papa is in line for the most influential position in the economy, and Junior has gigantic debts to the banks, the question must arise: can they really remain totally separate?

Gosh and golly, what a shock

Meanwhile, producers and writers in the television industry evidently have a highly unique interpretation of broadcasting company Reshet's decision to delay payment to suppliers.

On Thursday last week, TheMarker reporter Ronny Koren-Dinar revealed that Reshet, which belongs to a group of multi-millionaires, and which recently gave the state NIS 124 million to get its Channel 2 franchise renewed, and which just moved to grandiose new offices in ritzy Ramat Hahayal, is stiffing its suppliers. The holdout, lasting weeks, is threatening the very survival of some of them.

The producers gripe Reshet is using them as a weapon in its impending war with the Second Broadcasting Authority. Basically, Reshet wants the watchdog to understand that it is a sad puppy who needs a little nurturing. When it contended for the Channel 2 tender, it made certain undertakings and now it wants the watchdog to understand tha the terms were too onerous.

That take by the producers takes true creative talent. The producers reached their conclusions even before Reshet had had a chance to respond.

But Ronny Koren-Dinar did ask Reshet for its comment, and learned that the company's view is entirely different: The holiday caused a technical delay in payment, Reshet said. The problem has been handled, it added.

What is so hard to understand about that? That is the nature of business: it has its uncertainties.

Reshet is a respectable company that has been operating in the TV industry for more than 20 years. Suddenly, in mid-April, with no warning, surprise! Passover hit like a hurricane. So a technical glitch happened, so there was a surprise, why make a fuss?

An imaginary dialog that a fly on the wall might have heard:

Haim Zemel, Reshet's chief financial officer, walks into the office of CEO Yohanan Zangan: Yohanan, you won't believe this.

Zangan (just back from India, in a yoga position): Haim, not now.

CFO: Yohanan, sorry, but I have to interrupt you. We have an unpleasant development.

Zangan: Well, what is it?

CFO: It's a long story. It started with the exodus, when the People of Israel left Egypt, little baby Moses in his reed basket, Pharaoh's daughter, the burning bush, the snake, the Golden Calf...

Zangan: Cut to the chase, Haim. Cut to the chase.

CFO: OK, I'll get right to the point. Tomorrow is Passover eve. It's a terrible holiday thingie lasting more than a week, throughout which most of corporate Israel is shut down. This year the official holidays fall mid-week, too.

Zangan: Heavens to Betsy, how could a thing like that happen? Nobody tells me anything at this company.

CFO: Sorry Yohanan, believe me, the moment I was told, I came straight to you.

Zangan: What does this mean?

CFO: We can't pay our suppliers and producers this month. We'll have to wait for next month.

Zangan: Okay, they'll understand.

CFO: Why should they understand us, Yohanan? You're a former CFO, you know it's a hard story to sell. We've been in business for yonks and belong to some of the richest businessmen in the land - Oudi Recanati, Udi Angel, Zadik Bino, and Michael Strauss. How can we tell them that a company like us can't pay?

Zangan: Exactly.

CFO: Exactly, what?

Zangan: Exactly, they're used to this treatment. Oudi Recanati had been the chairman of Discount Investment four years ago, when it decided to let Tevel go bankrupt and creep to court begging protection from creditors. The producers know the rules of the game. Believe me, when Tevel collapsed, their situation was far worse.

CFO: But Yohanan, this is Reshet, we symbolize the warm, Israeli embrace. Don't you remember the vision we created for this company? It's on our website: we are committed to principles of credibility and responsibility, independent of constraints of time of market conditions.

Zangan: So tell them it is not a question of time or market conditions, it's these danged holidays that suddenly came from nowhere. How could we have known that Passover would suddenly up and happen in the middle of April? They'll understand.

CFO: OK, and what are we going to tell that reported, Ronny, if she calls? You know those producers and writers, they're always running with their gripes to TheMarker.

Zangan: Tell her the truth, Haim, the truth.

CFO: And if that doesn't work?
Zangan: Have you suggested she start writing for us?