Gaydamak loses top business manager after just 6 months

Uri Shani, the chief business manager of Arcadi Gaydamak's business group in Israel, is going home after just six months on the job. His departure exacerbates fears that the Russian-Israeli billionaire's business is in difficulty.

Shani took the marketplace completely by surprise Wednesday when his spokespeople released a laconic statement that he was leaving Gaydamak's business group. "This afternoon Uri Shani and Arcadi Gaydamak agreed to terminate Shani's activity in Mr Arcadi Gaydamak's group of companies. The parties intend and are acting to terminate their contract amicably." That was all.

Six months was not long enough for Shani to make much of a mark on Gaydamak's business. Shani, formerly the director-general of the Prime Minister's Bureau and chief executive of Housing & Construction, had received generous terms: a bonus of $5 million to $10 million just for signing, plus salary and a luxury car. His function was to create synergy between Gaydamak's worldwide operations, which include real estate, food, agricultural, finance, chemicals, the Beitar Jerusalem soccer club, Radio 99FM and Bikur Holim Hospital in Jerusalem.

Gaydamak evidently thought Shani's distinguished name would improve his own image in the eyes of the investment community, and perhaps advance his political ambitions. Shani, for his part, denied that money was the attraction.

Yet capital market circles remained dubious about Gaydamak and the four companies he'd bought. Shares of Ocif, Gilon Investments, Willi-Food and Petro Group continued to fall, and the bonds of Amaris (Petro's parent company) now trade at junk status of 62% returns, indicating deep suspicion the firm won't repay its debt to bondholders.

Gaydamak has lost more than NIS 700 million (on paper) on his investments in Israeli-listed companies, which he bought using a half-billion shekel loan from Bank Mizrahi-Tefahot, backed by the shares he bought - which plunged in value. The status of his private businesses is not known.

Shani carried out not a single transaction for Gaydamak, not in Israel and not abroad, although capital market circles believe that he had a green light from the billionaire to carry out acquisitions. People involved in Gaydamak's world say the tycoon may have given up on Shani and decided that he couldn't advance his goals.

However, Shani's associates said Wednesday that Gaydamak gave Shani no freedom as a manager, nor did Shani actually manage the business activity himself. "When you let the bulldozer work, it can move mountains," said Shani's associates. He'd been shackled, they said.

Shani isn't the first personality to leave Gaydamak's circle. His economic adviser and personal trainer in the arts of war, Gidi Marinovsky, left a few months back after six years with Gaydamak. Last month Shlomo Rothman left his job as chairman of Ocif, a year after being hired. Several players and coaches have also moved on from Beitar.

Never has Shani been fired or left a job so quickly. He probably won't be going back to his previous employer, Shari Arison, who owns Housing & Construction. In any case, he'll be busy working out severance compensation from Arcadi Gaydamak.

No comment had arrived from Gaydamak by press time.