Moti Ben-Moshe: IDB Group’s Restless New Master

In a wide-ranging interview with TheMarker, he talks about relations with co-investor Eduardo Elsztain, reveals his management style and hints at plans for the financially troubled conglomerate. Second of two parts

Send in e-mailSend in e-mail
IDB's Moti Ben-Moshe.
IDB's Moti Ben-Moshe.Credit: Eyal Toueg

When he and his partner Eduardo Elsztain assumed control of the IDB Group earlier this year, Moti Ben-Moshe inherited the office suite of the conglolmerate’s former boss, Nochi Dankner, in Tel Aviv’s Azrieli Center.

But in a sign of the new regime at IDB, all the ostentatious displays have been removed, including the art collection, which was sold at auction.

When TheMarker asked in an interview whether he had repaid the bank loan for his Hyundai sedan, Ben-Moshe smiled. As of now, he and Elsztain have received no salary for their work as IDB’s joint chairmen.

But along with this modesty is the great pride that self-made men and women take in their accomplishments. “Everywhere I went, I was always told I was out of my mind, that I didn’t understand how things worked,” says Ben-Moshe, relishing the story of his rise to riches in Germany.

“When I showed my business plan for getting clients to purchase electricity from Extra in Britain to one of the senior managers, trying to get him on board with it, he told me it was not realistic and that it would take at least three years. Why? Because that’s how long it took other companies. Actually, what other companies did in five to six years we did in six months – and we even surpassed our own forecasts.”

A shade of arrogance is noticeable when Ben-Moshe is asked what is being done in IDB Group’s companies. He is not shy about claiming credit for the changes, such as the strategic plan for Supersol, Elron’s portfolio of high-tech companies, a new CEO for Adama or its impending stock offering in the United States.

If Ben-Moshe does not get along with Elsztain, the Argentinian real estate magnate, he refuses to admit it in public. “In a marriage, there are always disagreements with one’s spouse,” he says. But asked to name something he learned from Elsztain, he has difficulty answering.

Small change

You and Elsztain took the reins at IDB in May, and even before that you both were involved in it. There were expectations that you would bring about changes, particularly that you would replace some of the managers who associated with Dankner. Why didn’t that happen?

“There were expectations, but we’re not into making heads roll. We’re getting to know all the people in the companies and their specific gravity. Elsztain and I are heavily involved in the day-to-day management of the companies on the slope of the pyramid.”

People in the market tell us that they don’t understand why a person like Haim Gavrieli, who is closely identified with Dankner, still serves as the CEO of IDB.

“Personally, I was pleasantly surprised by Gavrieli. Although he could have acted differently in the situation that was created, he chose to behave in a highly mature, professional and responsible manner.”

So you don’t intend to replace him?

“At the moment, he is the CEO.”

How much time do you devote to IDB, and how much time do you devote to your businesses abroad?

“I spend 60% of my time in Israel.”

Many people close to IDB said that you and Elsztain would not get along. They said you had different personalities and different styles. It seems that some of that is noticeable in the fact that you haven’t made any important appointments or other significant moves. How do you manage to get along with Elsztain?

“I don’t know where those malicious rumors are coming from. It seems that there are a lot of people with their own interests. The company is not paralyzed. Elsztain and I reached an agreement about the decision-making process. It is true that we are two different people and sometimes we have differing opinions, so it takes us more time to reach decisions. That’s very natural. Elsztain is involved more through his representatives, while I’m here more often. Like any married couple, we have disagreements sometimes, but we resolve them. Every married man argues with his wife, and she gets the last word in the end.”

It is true that you divided the concern between you such that you work more with Supersol and Cellcom Israel, while Elsztain works more with the real estate companies?

“Elsztain’s representatives and I are involved in all the companies. If I’m more involved in the retail field, that doesn’t mean that Elsztain’s representatives do not attend meetings or that things are not done with complete transparency.”

So you’re not about to dissolve your partnership? Will it last?

“Both of us believe in the investment we made and in the enormous potential of the companies in the group, and we also see the possibility of improving them. While the partnership agreement contains a ‘buy-me, buy-you’ clause, I’ve never thought of invoking it, and I assume that Elsztain is not interested either. We will end 2015 together as partners in IDB.

Still, you worked with private companies without partners for many years. Now you have acquired a public company that is quite complicated and in crisis, with a partner you hadn’t known before. It’s a bit hard to believe that everything is going smoothly.

“I guess that if each of us were to work alone, things would go differently and move more quickly too. We have different ways of looking at things, based on the background each one of us comes from. It’s true that we don’t agree on everything, but at the macro level, taking the long view, we do agree, and we agree about the way we will reach decisions.”

Points of agreement

Do you have examples of things about which you agree?

“We agree about certain processes that must take place within the company, since we share the risk. We decided together to keep the operating companies going. Both of us were glad that Clal Insurance stayed in the group and was not sold. We agreed that it was right to consolidate the headquarters of IDB Development, Discount Investment Corporation and Elron into one headquarters. After the consolidation, those three companies will have one CEO and one CFO. We predict that the move will save us a significant amount of headquarters costs, about 30-40%.”

From what you have said, you are not that much in favor of selling off assets. Does Elsztain think as you do?

“I don’t buy assets so I can sell them. Elsztain favors the idea that everything is for sale, but that it depends on the price. We reach the same result in the end.”

Did you think about bringing a third partner into IDB?

“This may come as a surprise to you, but I got a lot of offers from people who wanted to become partners. I told them I wasn’t interested. I heard that Elsztain got offers, too. Even though some of the offers I got named a higher price than the one I paid, I said I wasn’t interested in selling IDB.”

Who was interested in acquiring IDB?

“I’m not going to name names. Some very serious players made offers.”

Isn’t it very hard work to rescue IDB while running companies overseas?

“I like to work. I didn’t sleep much before acquiring IDB, and I don’t sleep much today.”

Whom do you consult with?

“That’s a very short list. I analyze everything by myself. Some people say that’s one of my problems, while others see it as an advantage.”

It seems that you rely a lot on yourself.

“That doesn’t mean I don’t trust people. But even when someone is helping you, you need to know what you’re conveying and to whom. I learn new things every day that I’m with the group. In my opinion, to reach a decision you need to understand things in-depth and get to know all the numbers. You can’t make decisions in an ivory tower alone.”

People in the market say that before you decide which consultant to hire, you let him do his homework at the level of a seminar paper, and only then do you decide whether to take him on.

“Many companies contacted me, asking for work. I don’t like working with people who tell me what they think I want to hear. I’m very open to changing my opinion if I realize that I was wrong. I’m not looking for yes-men. It’s true that I’m a dominant type, but the managers who work with me know that I look for fruitful debate to develop the business.”

After the Clal Insurance deal was called off, you failed to get permission from the commissioner of capital markets, insurance and savings for permission to hold on to it. If you do not receive approval by the end of the year, you will have to sell it. Have there been signals from Jerusalem about the matter?

“I see no reason why we would not get approval. We have to show that each one of us individually has the capital needed to own the company. I believe that Dorit Selinger, the new capital markets chief, will be convinced that we have more than the required amount of capital.”

This is more than a billion shekels of personal capital, beyond the future investments in IDB and the capital needed to shrink the pyramid to bring it into line with the Business Concentration Law. Will you be able to do that?

“I’ve kept all the commitments I’ve made to this day, and I will succeed in meeting this one as well. If there is a commitment, we will keep it. We will not break the law. We don’t plan to keep all the assets and operations that exist now in IDB. We will improve and sell some. On the basis of the money we promised to put into it, IDB Development will reach the end of 2015 with no problems.”

Click the alert icon to follow topics:



Automatic approval of subscriber comments.

Subscribe today and save 40%

Already signed up? LOG IN


בן גוריון

'Strangers in My House': Letters Expelled Palestinian Sent Ben-Gurion in 1948, Revealed

The Orion nebula, photographed in 2009 by the Spitzer Telescope.

What if the Big Bang Never Actually Happened?


AIPAC vs. American Jews: The Toxic Victories of the 'pro-Israel' Lobby

Bosnian Foreign Minister Bisera Turkovic speaks during a press conference in Sarajevo, Bosnia in May.

‘This Is Crazy’: Israeli Embassy Memo Stirs Political Storm in the Balkans

Hamas militants take part in a military parade in Gaza.

Israel Rewards Hamas for Its Restraint During Gaza Op

Palestinians search through the rubble of a building in which Khaled Mansour, a top Islamic Jihad militant was killed following an Israeli airstrike in Rafah, southern Gaza strip, on Sunday.

Gazans Are Tired of Pointless Wars and Destruction, and Hamas Listens to Them