Roundup / Found the Towels, Where's the Gas Mask?

Ofer Investments sued over management fees while Housing & Construction sets up shop in Texas.

Where are the gas masks? Tourists want to know: Despite a nice boost in revenues from its hotels, Alrov on Sunday reported a 75% year over year drop in net profit to NIS 19 million for the second quarter of 2012. The main culprit was revaluation of an office building in Switzerland. The same problem reduced its total revenues (including from hotels) by 20% against the corresponding quarter the year before to NIS 211 million. While on the hotels, controlling shareholder Alfred Akirov remarked that every tourist coming to the company's hotels in Israel asks where the gas masks are. Even though the hotels are pretty much crammed to capacity ahead of the Jewish holidays, Akirov admitted that the industry is worried about cancelations as tensions with Iran mount. Meanwhile, Alrov's second-quarter revenues from the hotels business increased 30% to NIS 128 million.

Melisron sued over management fees: A minority shareholder in real estate company Melisron sued on Sunday, claiming the controlling shareholder Ofer Investments is withdrawing too much in management fees. When Ofer Investments increased its holding in Melisron in 2000 and again in 2004, the original management agreement between the two companies was amended to increase the fees – but the amendments were never brought before the general shareholders assembly for ratification, claims the stakeholder. "The absolute rule by Ofer Investments and Leora Ofer over Melisron enabled them to abuse their power, utterly ignoring the fact that they were in a material conflict of interest," claims the shareholder. He also claims that Leora Ofer neglected her duties as director and as controlling shareholder of Melisron, prioritizing the interests of Ofer Investments and herself over Melisron's. The shareholder feels Ofer Investments and Leora Ofer should return some NIS 18 million to the company.

Housing & Construction gets guarantees for U.S. works: Shari Arison's company Housing & Construction wants to expand its infrastructure works in the U.S., for which sake it announced a $400 million guarantees agreement with the insurance company Zurich American, to back its activities in the States. In exchange for the agreement, H&C paid a non-substantial amount to Zurich American, it said, and also undertook to maintain minimal financial ratios. It’s set up an American headquarters in Houston, Texas. The company's aim is to derive half its income from works outside Israel.

Who calls the shots at Mizrahi? The CEO rules the roost and the directors on the board are little more than rubber stamps, say Bank of Israel officials in a draft report TheMarker has obtained. The Bank of Israel began an inquiry into corporate governance practices at Bank Mizrahi-Tefahot two weeks ago. The trigger behind the probe was a letter that reached the press in which Yones railed at two of the board members, Avraham "Beiga" Shochat and Dov Mishor. The board is supposed to supervise the CEO, in this case Eli Yones, but in practice he does as he sees fit, the central bank feels. Mizrahi-Tefahot is Israel's fourth-biggest bank. For the full story, stay tuned tomorrow.

More power to Sunflower: Hooking up all its solar-power farms in Italy to the national grid boosted revenues and profits at alternative-energy company Sunflower in the second quarter of 2012. Sunflower said it netted NIS 2.2 million, compared with losing NIS 1.3 million in the corresponding period of the year before. In the first quarter, it must be said, the company had netted NIS 4.1 million. Second-quarter revenues doubled year over year to NIS 32.5 million, an increase of 36% from the first quarter: The company ascribed the jump to Italy.  Perhaps adjusting expectations, the company begged to note that its solar-power business tends to be strongest in the second and third quarters of the year, or in English, in summer. Spain has also been a growth driver for Sunflower.