Law office represents for and against two of Ofer's companies
Idan Ofer against himself?
Idan Ofer against himself?
The law firm Fischer Behar Chen Well Orion & Co. seems to be in a pickle. The office represents the government in arbitrating a royalties case with Israel Chemicals, which is controlled by Idan Ofer's Israel Corporation. At the same time the firm represents Better Place, which Ofer, through his Israel Corp. is heavily invested in. The conflict of interest was first exposed in a blog on TheMarker Cafe. The blogger's request for a response from FBC went unanswered. The treasury is examining the issue.
Regarding its representation of Better Place, the firm's website says that this involves working together with several government ministries to develop a legal and regulatory framework for the electric car market in Israel. It also involves obtaining a wide range of licenses and permits for operating an infrastructure for electric cars, preparing a billing system and representing Hitachi in its dealings with Israel Electric Corp. on issues regarding operating the infrastructure.
According to the Barlev audit report, ICL owes the government over NIS 100 million for past-due royalties. The report examined whether ICL fulfilled its obligations in paying royalties to the state at the rate of 5% from its production of minerals and by-products. The study revealed that ICL apparently made entries in its financial statements which included sales to subsidiaries at reduced prices, thereby reducing the amounts recorded as owed for royalties.
This was done despite the fact that the company has been extremely profitable, to the extent that it has distributed since 2003 a total of more than $11 billion in dividends.
ICL responded that it pays royalties as it is required to. The treasury is currently considering its future royalties policy with regards to the company. The sides are also in discussions regarding the cancellation of hundreds of millions of shekels in tax benefits ICL currently enjoys.
"It is not true that the firm has a conflict of interest," FBC said in a statement. "The firm does represent the state in the mediation of the Dead Sea Works and ICL concessions issue. At the same time we do not serve at all or in any other way as attorneys for the Ofer Brothers group, the Israel Corp., ICL or the Ofer family. The firm represents Better Place Israel. Our work is performed with the professional management of the company, including CEO Moshe Kaplinsky and other executives, and not with its shareholders. The treasury will issue a comment separately."
The treasury said FBC had been required to disclose any conflicts of interest it had with the Israel Corp. and did so in the contract and tender, without making any mention of Better Place. "The issue presented here does not raise any problem of conflict of interest," the ministry said in a statement. "FBC, which represents the state in the controversy with Dead Sea Works on the question of royalties owing to the state, does not serve as the law firm of the Ofer Brothers group, the Israel Corp., ICL or the Ofer family. The firm's representing of Better Place Israel is performed with the professional management of the company (CEO Moshe Kaplinsky and other members of the company's professional management ), and not with the shareholders. We would like to point out that the chairman of the board of Better Place Israel is Mr. Shai Agassi (not Mr. Idan Ofer ) ... It should also be pointed out that this response was issued with the approval of the Justice Ministry."