Daily Roundup / Appalled Treasury Claims Tel Aviv Overpaying Officials

Bloomberg crowns Israel's richest Israeli; shareholders grab sweetened price on HOT stock

Treasury appalled to discover overpaid Tel Aviv city officials: Finance Ministry officials waxed wroth over the discovery that dozens of Tel Aviv municipality officials have been overpaid, going by the rules of civil service salary norms. The salary discrepancies were discovered during an audit by the treasury civil-service wages director in 2011. The amounts in excess ran as high as NIS 14,000 a month and were, it seems, paid out of the city taxes (arnona) forked over by the denizens of Tel Aviv. The origin of the practice lies in the city interpreting the law in a manner the Finance Ministry and labor courts frown on, says an insider in the know. Meanwhile the city and Histadrut labor federation are adamantly refusing to hand over specific data on pay practices at city hall and even threaten a strike over the issue.

Beny Steinmetz is the richest Israeli, says Bloomberg: Businessman Beny Steinmetz, owner of mining interests in Africa, real estate and apparently much else, is the richest Israeli with estimated personal wealth of around $8.1 billion, says Bloomberg. Steinmetz, 56, is in fact the only Israeli on Bloomberg's list of the 200 richest people in the world. His wealth grew by 2.8% from the start of the year, the news organization estimates.

Activists try to foil "trapped profits" law: Two groups of social activists have allied to block legislation that would free "trapped profits" in exchange for a modest tax bite. The movements Dear Israel (Yisrael Ykara Lanu) and Hamishmar Hahevrati wrote to Knesset Speaker Reuven Rivlin urging him to hold up legislation of the so-called Trapped Profits law on the grounds that interest groups were trying to fast-track it before the elections, turning a proposal into irrevocable law that doesn't do enough for the public good. The law is designed to help big businesses send home profits made in Israel, and "trapped" here by the fact that expatriating the money for use outside Israel would incur a 25% dividend tax. The tax the bill proposes is much lower.

U. Dori to raise NIS 70 million: Engineering company U. Dori is gearing up to hawk NIS 70 million in bond debt, ahead of which Midroog credit rating agency ratified the company's medium-to-high A3 credit rating. It also upgraded the company's outlook from Stable to Positive, portending a rating upgrade in the foreseeable future. U. Dori, no longer controlled by builder Uri Dori but by the business group Gazit Globe, builds housing and industrial constructs in Israel and Poland and has NIS 420 million in outstanding debt.

How much you'll get for HOT stock: A proposal to buy back the public's holdings in cable company HOT and to delist the firm will be raised at a general assembly of shareholders on Wednesday. Patrick Drahi will be offering NIS 41 per share through his privately-held firm Cool Holdings (which owns 69% of HOT's stock). But it seems that because of historic agreement when Drahi bought HOT, the former majority shareholders – the businessmen Eliezer Fishman (6.9%) and Noni Mozes (3%) – will be getting a sweeter price, around NIS 51 per share. In other words they'd get a premium of 24%.

EZchip will disappoint, frowns Harel: Toward the end of this week, EZchip will be filing its third-quarter financials. Brace for disappointment, warns Harel Finance's analytical team, headed by one Rami Rosen. They suspect the firm will fall short of its guidance to investors, even though its guidance had been very low to begin with; the main reason is slower than expected investment in equipment by the telecom companies that need EZchip's products. The Harel team lowered their target for EZchip by 5% to $36, but reiterated an Outperform rating.

GTC Poland exits properties: Kardan NV vehicle GTC Poland has signed agreements to sell three rather small shopping malls in Romania for 6 million euros. Since all had been losing money as far as GTC Poland was concerned, the selloff should improve the firm's cash flow. GTC Poland explains that given the market conditions, it preferred to exit and increase its cash flow rather than keep ahold of the assets and wait for them to generate value.

With reporting by Zvi Zrahiya, Dror Raich, Hila Weisberg, Yoram Gabison and Eran Azran