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The vote at yesterday's shareholders assembly was far from unanimous, but the insider deal is done: Two IDB group companies will be paying rich fees to the Schimmel brothers, who share control of IDB with Nochi Dankner, for mediating property deals.

The two group companies, Koor Industries and Property & Building, signed five-year agreements yesterday ratified by shareholders, under which a Schimmel family firm called Rock Real Estate may offer projects to them. Rock Real Estate will escort the projects, in exchange for a 12% share in capital gains deriving from the projects, if any.

In some cases Koor and P&B will also bear additional mediation costs, if any. The deal applies to the acquisition of the HSBC headquarters building in Manhattan in October, which cost Koor and P&B about $330 million (in equal parts).

Under the terms of the deal with the Schimmels, if (for instance) the HSBC building is sold for $500 million next year, Rock Real Estate will get 12% of that, minus costs.

The Schimmel brothers, Marc and Jacob, own 10% of Ganden Holdings, the holding company through which Nochi Dankner controls the sprawling IDB group of companies.

At the shareholders assemblies yesterday held by Koor and P&B, some of Israel's biggest institutional investors supported the insider transaction: Excellence and Phoenix, both of which belong to Yitzhak Tshuva's Delek Group; Migdal; and Harel. Menora-Mivtachim, Analyst and Meitav-Gaon also voted aye.

The camp opposing the broking agreement included Psagot, headed by Roy Vermus, who has been vocal in his defense of shareholders in the wake of Africa Israel Investments' default. The investments firm DS also voted nay, as did representatives of Tel Aviv-based brokerage IBI and the Mivtachim pension fund.

"There are tens of thousands of brokers in the U.S. Why contract with the Schimmel family, whose deals haven't proven themselves for the last five years?" sniped the manager of one financial institution yesterday. "Why give them an option for 12% of the capital gains just because they're Dankner's partner in Ganden?"

Out of the disinterested shareholders in Koor, 62.5% voted yea for the deal yesterday. The rest opposed it. At P&B, 65% of the disinterested shareholders voted in favor.

By the way, Marc Schimmel sits on the boards of directors at both Koor and P&B, while his brother Jack Schimmel sits on the boards of IDB Holding and IDB Development.

IDB has done business with the Schimmels before. In 2007 P&B advised investors that it was increasing its holdings in three Las Vegas residential projects, for $41 million. Two months later the company said the Schimmels and their partners had rights in the projects. In 2008 P&B agreed to buy land from them and partners in Ukraine for $33 million, but that deal fell through.

"The Schimmels have been in property for 20 years. They live in London, the hub of the global real estate market ... Somehow they met Nochi Dankner and invested in Ganden," says a source near P&B. IDB had been trolling for business and the Schimmels had deal flows to show, he said. Besides, the IDB people would sooner pay insiders rather than fork over gigantic finders' fees to third parties that nobody in the group knows, he added.

In the original form of the agreement between the IDB group companies and the Schimmels, the family also would have gained from profit on paper when property values were reappraised upward, the source said. But ultimately Koor and P&B decided they'd pay only when they sold the asset and got the compensation. "In any case, the agreement is limited to five years," he said. "It can be terminated at a month's notice by either of the parties."

Nor are the group companies committed to any deal the Schimmels offer, he pointed out. The IDB firms can pick and choose and the Schimmels will, as said, get paid only after the Israeli companies get money in hand.

Insider deals are not new at IDB. Leaving the Schimmels aside, Nochi Dankner appointed his daughter Rona Dankner to the boards of directors at Elron Electronics Industries and at Property and Building. In another controversial insider transaction, Dankner obtained the shareholders' permission for IDB Development to buy his company Ganden Tourism, though its main holding - Israir - has lost $109 million since its establishment and has a $79 million shareholders equity deficit.