Fallen Israeli Tycoon Accused of Moving $453 Million to Dutch Company

The explanations given for massive offshore transfer 'contradict one another,' says special administrator

The court-appointed special administrator of the assets of fallen business magnate Eliezer Fishman has accused him and his family of transferring 1.6 billion shekels’ ($453 million) worth of their assets to a Dutch company that the family controls.

The assets were transferred among companies controlled by Fishman and members of his family, Joseph Benkel, the administrator, said. He asked Tel Aviv District Court Judge Eitan Orenstein, who is handling Fishman’s bankruptcy case, for an order liquidating Fishman Family Assets. Benkel also asked to be appointed the liquidator of Fishman group companies including Fishman Family Assets.

Benkel claimed that the 1.6 billion shekels in assets was transferred to a Dutch company called the FTT Group, which he said is controlled by Fishman and members of his family, adding that the Dutch company owes 1.06 billion shekels to Fishman Family Assets. “The explanations that the debtor [Fishman] and members of his family gave for this massive transfer of cash abroad were, to put it politely, stammering, and in practice contradict one another,” said Benkel.

In essence, Benkel claims that the funds were transferred to FTT, in which Fishman holds a 24% stake, and that the transfer was made by Fishman Family Assets, a company in which Fishman is a 55% owner. The alleged transfers were purportedly made between 2002 and 2013. It is not clear if members of the Fishman family have drawn on the funds in question, but Fishman Family Assets and FTT take exception to Benkel’s claims.

Once one of Israel’s most powerful tycoons, Fishman’s Jerusalem Economy Corporation fell victim to the collapse of its Russian real estate portfolio. As of July, Fishman had debts of about 2.8 billion shekels after creditors seized assets valued at about 1.2 billion shekels, stated a report that Benkel filed with the court at the time. The report was the first to detail Fishman’s finances following the formal declaration that he was bankrupt.

Benkel alleged that as far back as 2002, Fishman Family Assets had contracted with FTT to occasionally direct funds to the Dutch company, either in writing or at the oral request of FTT. It was not clear, Benkel alleged, what the reasons for the transfers would be or for what purpose the funds would be used.

Fishman Family Assets and FTT responded to Benkel's allegations: “The trustee of the Fishman assets transgresses the truth again and again and chooses to present fabrications despite the facts (which he positively knows), in an effort to be appointed to a position with Fishman Family Assets. The companies will respond in detail to the court and will set matters straight. We can only regret that the trustee – a court representative – has found it appropriate to submit a filing to the court containing things that he knows are not correct.”