State comptroller investigates Ashot Ashkelon's privatization
State Comptroller Micha Lindenstrauss criticized the privatization of Ashot Ashkelon yesterday at a meeting of the Knesset State Control Committee, and said he had begun investigating the circumstances of its sale to the private sector.
The company, a manufacturer of sophisticated gear assemblies and short and long shafts for gas turbine engines, as well as sintered tungsten, was sold for NIS 16.7 million to a consortium including former Knesset speaker Avraham Burg and, according to reports in Yedioth Ahronoth last weekend, two others who were banned from buying the company after having committed fraud.
"The sale of the company at a price like this demands a speedy and thorough investigation, and until then, the privatization should be halted," said chairman of the committee, MK Melli Polishuk-Bloch (Shinui). He added that the sale of a company to a private group should be done "correctly, with minimal harm to the workers and with their agreement."
Head of the Government Companies Authority Eyal Gabbai defended the move, arguing that he was trying to conduct "the economic processes best for the State of Israel, while under compulsion, as the public processes take time. If we could have sold the company over night, then maybe we could have got a higher price," he told the parliamentarians. "During the privatization process the government lost millions of shekels." He said that during the period prospective buyers had eventually dried up, "and in the end we were instructed by the treasury to wrap it up, which we did."
Gabbai also referred to the consortium's financing, saying that the GCA had investigated the backers. "We built a Chinese wall between the money and the company to avoid the situations that these parties would buy the company. We achieved a balance between the need to prevent these parties from controlling the company and the possibility to let them just finance it."
Ashot Ashkelon acting CEO Dan Katz argued that the sale was necessary to save the company and ensure the 400 jobs. A company worker representative though claimed the staff had been derided. "We're not dogs. The plant is failing only because management is impotent and helpless."