Ofer Brothers Spurned Russian Investor's Bid for Israel Corp.

Russian-Israeli businessman Arkady Gaidamak was the investor who last year approached the Ofer family, which controls the Israel Corp, with an offer to buy their holdings. Gaidamak's Israeli lawyer, attorney Yaakov Weinroth, even asked accountant Zeev Feldman, the former CEO of FIBI Investment House, for a due diligence check on the company before the deal.

Through a number of companies the Sammy Ofer family owns 60 percent of the shares in Israel Corp, which in the past year doubled its market value to about $1.2 billion. The company spokesman confirmed an offer had been made, but immediately rejected and the parties never entered talks. Weinroth would make no comment, as Gaidamak is his client.

The Israel Corp. is one of the country's largest investment bodies. Its main holdings are Israel Chemicals, Israel Oil Refineries, Tower Semiconductors and Zim Israel Navigation, half of whose shares the government bought last January for NIS 500 million.

The Israel Corp. is chaired by Sammy's son Idan. Sammy gained the controlling stake in the company after buying out his brother Yuli in February 2003 for an undisclosed sum.

Over the years Gaidamak, 52, has formed close ties with the most senior figures in the countries in which he has lived, and thus promoted his businesses. He holds four passports - Israeli, French, Canadian and British - and apparently made some of his fortune in the quarries of the former Soviet Union.

Gaidamak owns three phosphate mines in Kazakhstan and is considered the biggest phosphates merchant in the western hemisphere. He also has interests in gold and oil and substantial properties in Angola, known for its diamond reserves.

For many years Gaidamak lived in France, where he says he worked as a translator. There he befriended the Dessault family, which owns the epynonamous avionics giant. In 1996 British newspaper The Guardian reported that Gaidamak had been honored by the French government, supposedly for his assistance in securing Russian contracts for French agricultural bodies, while in truth the honor was for helping rescue to French pilots who had been captured by Serb fighters in Yugoslavia the previous year. In 1997 Gaidamak helped gain the release of four French workers in Dagestan.

Despite these deeds, France recently issued an international warrant for Gaidamak's arrest in connection with the Falcone Affair, in which illegal arms were allegedly sold to Angola via a French company, Brenco International. Jean-Christophe Mitterand, the son of the late French president, was also arrested in this affair. Gaidamak is suspected of being the main partner of Brenco's CEO, Brazilian arms dealer Pierre Falcone.

Gaidamak is also suspected of tax violations, but has never been indicted. According to a 2002 article in French newspaper Le Monde, Gaidamak was involved, along with the Chernoy brothers, in embezzling tens of millions of dollars from the Russian central bank in the early 1990s, when he was supposedly merely a translator.

Gaidamak's biggest investment in Israel was a 15.5-percent stake of Africa Israel, controlled by Lev Leviev, who acquired Gaidamak's stake in 2000 and 2001.

In April of this year TheMarker's list of Israel's 500 Richest estimated Gaidamak's personal worth at $900 million. According to banking sources, Gaidamak has accounts here totaling some $400 million.