Israeli Power Plant Generates Fat Salaries, but Not a Watt of Electricity

Send in e-mailSend in e-mail
Send in e-mailSend in e-mail
Ashkelon power plant. Credit: Dan Keinan

Five years ago and some, a group of businessmen from the former Soviet state of Georgia forked over more than $50 million to build a private power station in Israel.

Yet after all this time, not a brick has been laid. The plans remain on paper and the only thing that’s been produced is a bunch of local millionaires.

The story began in January 2011, when the Georgian investors bought 84% of a license to build a power station in the Be’er Tuvia industrial zone, for a mere 7 million shekels ($1.8 million at current exchange rates), from the Arison Group. They also paid 83 million shekels to buy the 62 dunams of land from the IDB group on which the power station would arise.

From that point, the investment group, called Triple M Power Plants, began to inject money into the IPM Be’er Tuvia Power Plant, above which a business platform was formed to advance the project.

Triple M was headed by the Ashdod-based businessman Avraham Nanikashvili, and included the enigmatic Swiss businessman Marcus Weber (who came a cropper, together with Nanikashvili, in another investment in a company called Financial Levers); and the hydrocarbons expert Dr. Semion Weinstock (former chairman of Financial Levers), and his son in law, the global aluminum trader Boris Lokshin.

But behind all these stood the main investor, the Georgian tycoon Timor Ben-Yehuda (Khechinashvili), whose global business includes real estate, energy, finance and medical centers.

In 1982, Ben-Yehuda moved from Tbilisi to Moscow, which is where he spends most of his time, though in 1993 he formally made aliyah to Israel and received Israeli papers. Regarding Triple M, Ben-Yehuda only took center stage in 2015 when the project was running into trouble.

Nanikashvili, who ostensibly managed Triple-M, has suffered many a blow in recent years, including the flop of the oil exploration company Shemen, his involvement in a stock-manipulation scandal at Financial Levers and ostensible involvement in corruption at Ashdod Port. He was also charged with allegedly bribing a former cabinet minister, Binyamin Ben-Eliezer.

Ben-Yehuda’s name also arose in these contexts but not as a suspect. During the investigation of the Financial Levers stock manipulation, it was discovered that Nanikashvili and Ben-Yehuda had shared business in Moscow, and that Ben-Yehuda was supposed to provide the money to buy the illegally manipulated Financial Levers stock. That affair recently ended in the conviction of Jacky Ben-Zaken, a protégé of Nanikashvili.

During Ben-Eliezer’s grilling by police, it emerged that after he received hundreds of thousands of dollars from Nanikashvili, he allegedly suggested helping Ben-Yehuda with local paperwork, and recommended his appointment as deputy chairman of the Israeli-Russia business council.

The upshot is that the Justice Ministry has demanded that Nanikashvili exit the power station projects, or it would yank its license. Nanikashvili then tried to sell his “holdings” in the project to an investment bank in Azerbaijan, or alternatively to Ben-Yehuda, but the Justice Ministry foiled the transactions, on the grounds that they weren’t genuine transfers of ownership.

Meanwhile, a question mark began to hover over the designation for tens of millions of shekels that Triple M received over the years, ostensibly for transport and infrastructure projects.

All the bombast and dreams have culminated, for the nonce, in one power plant that’s still on paper. The question remains what exactly happened to the 40 million-to-60 million shekels Triple M received over the years, which certainly weren’t spent on building anything.

Put otherwise: If the body advancing the power plant project is IPM, in which Triple M owns an 84% interest, and if IPM has been managed in recent years by a full-time CEO, Asaf Whitman (a former Israeli economic attaché in Washington), what the devil is Triple M doing that requires tens of millions of shekels?

For what did the “holdings group,” with a mere five employees, hired to promote the IPM project, need such huge sums?

It’s hard to know for what purpose the money served, but one can find out who got it.

For instance, from 2011, 12.4 million shekels of the investment in Triple M reached the pockets of former Israel Securities Authority chairman Moshe Terry, including during the time Nanikashvili was being grilled by the ISA itself over the alleged Financial Levels fraud.

Terry, one of the better connected people in Israeli business circles, had been presented as chairman of Triple M, and even received 10% of its stock. He was activated mainly when the power station project ran into regulatory obstacles.

Terry’s buddy Moti Friedman, former chairman of the Israel Electric Corporation, who helped found the group before the Georgian investors came on board, also owns 10% of Triple M and, like Terry, has received about 150,000 shekels a month. Each also got car and chauffeur.

In 2011, Triple M named as its CEO one Gadi Goursky, a son-in-law of President Reuven Rivlin.

It is but ironic that Nanikashvili was “responsible” for Binyamin Ben-Eliezer withdrawing his candidacy to be president of Israel (via the alleged bribe), while at the time employing the son-in-law of another contender in the presidential race, who won.

Anyway, Goursky gets 60,000 shekels a month, though as said, Triple M has another full-time CEO promoting the project.

One has to wonder why over five-and-a-half years, Triple M spent almost 600,000 shekels a month on pay.

To be fair, Nanikashvili and Ben-Yehuda probably don’t need Goursky for the sake of building relations with the Likud, the party in power. If Terry’s connections weren’t enough, Nanikashvili himself has long-standing relations not only with Ben-Eliezer and the Labor Party, but within Likud too.

It began back with Nanikashvili’s former business partner, MK Ephraim Gur (who had employed the young Ben-Zaken as a parliamentary aide); it continued with brother Yehuda Nanikashvili’s involvement in vote-getting in Ashdod.

In any case it turns out that for all Terry and Friedman’s contacts in politics and business, Triple M wanted more and employed other prominent characters in the back rooms of politics.

The most senior of these was Avi Benayahu, a former army spokesman, who turns out to be a strategic consultant to IPM. From 2011 his company has received about 1 million shekels. (Benayahu was also hired to advise the ill-fated Shemen).

Another political/media figure employed by IPM was Yehoshua Mor Yosef, former spokesman for the Yesha Council and army radio. He recently represented Ashdod Rabbi Yishayahu Pinto, who had received very generous donations from Nanikashvili and Ben-Zaken, through Financial Levers.

Though Benayahu and Mor Yosef were both working with IPM, the company’s PR was handled by yet another company, that of Moshe Debby, and the lobbying firm of Goren-Amir, which together get 46,000 shekels a month. Triple M is paying consultants 1-to-2 million shekels a year.

Amid question marks regarding Triple M’s financial management, meanwhile a nasty dispute has erupted between incoming shareholders Ehud Ben-Shach and Nissan Caspi, with Moshe Terry and Motti Friedman.

A month ago TheMarker reported that under pressure from the Justice Ministry, which ordered them out of the project, Ben-Yehuda and Nanikashvili agreed to sell their 80% in Triple M to their partner in the power station, Global Power, which presently owns 3%.

Global Power, owned by Ben-Shach and Caspi, agreed to pay $85 million. But Terry and Friedman, with their 20% stake in Triple M, strenuously objected.

They claim that beyond the pay they got (25 million shekels over the years) and the stock (20%), plus the cars and chauffeurs Triple M pays for, they also have a promise by Nanikashvili that if Triple M sells its controlling share, it would sell their stakes, too.

The snag is that the agreement with Global Power, signed two weeks ago, doesn’t mention any such undertaking, nor does it appear in the company’s documents. The upshot is that Global Power could force Terry and Friedman to hand over equity or find themselves diluted.

The two furiously threatened to trip up the deal if their status isn’t protected. They brought in Nanikashvili to invest in Triple M, they say.

The buyers say not one of their claims has been proven or verified by Nanikashvili or Ben Yehuda, and absent a proven commitment by Triple M itself, they don’t owe anybody a thing, and Terry and Friedman should stop casting aspersions.

Now the controlling shareholders are moving to fire Terry and Friedman, who are meanwhile impeding the due diligence process and threaten to sue to block institutional investors from coming on board the project.

Triple M, Benayahu and Yosef-Mor declined to comment.

Click the alert icon to follow topics: