Give Us a Bite

Even if you don't agree with Yitzhak Tshuva's campaign, admit it: The wild card he drew out of the sea is everyone's ace.

In late 2008, Yitzhak Tshuva's business seemed about to collapse. His flagship company, the Delek Group, teetered on the verge of bankruptcy and threatened to bring down his entire, self-made empire.

Yitzhak Tshuva Sept. 5, 2010 David Bachar
David Bachar

Tshuva kept up an optimistic mien during those bitter months, but entertained inner doubts about whether he could withstand the typhoon of the worldwide financial crisis.

Throughout, Tshuva believed that the low interest rates instituted then by the banks and in force to this day would provide a way out of the crisis.

He was right. Partly.

Low interest rates strengthened some of his businesses. But the real rescue came from the deep blue sea, literally. Companies under his control found vast deposits of natural gas at Tamar, a deep-sea exploration site off the Haifa shoreline.

The discovery caused feelings about Tshuva to change overnight. A year later, he's in a different place. His businesses are in good shape, and in the field of fossil fuels they're in great shape: near Tamar there's been another discovery, perhaps even greater, at the site called Leviathan.

Leviathan stirs, and changes the rules

The situation is so good that the Finance Ministry is considering raising the royalties it collects on gas. Tshuva, who just a year ago tried to trim investors' earnings on Delek bonds, is now fighting to stop the public treasury from changing the rules on him and taking a bigger bite of gains from the gas.

This behavior and other aspects of his business must beg questions about our choice of him as a representive of positive influence on the Israeli economy.

On the one hand, Tshuva is the epitome of the Israeli dream: He is a self-made man, with no education. No scion of millionaires, Tshuva began as a small contractor and built an empire of enormous proportions with arms in energy, insurance, automotive, infrastructure and real estate.

He challenged an elite family in Israeli business (the Recanatis ), gained control of its company (Delek ), and diversified his holdings with the aid of talent and luck.

He was not deterred by previous failures to discover oil in Israel. He took a huge gamble, and he won.

Yet for all his towering ambition, Tshuva is not aggressive. He does not stoop to dirty wars. He's a nice guy: courteous, a hugger and smiler who believes in dialogue, even with opponents.

We think this is all a positive influence on the business sector and the Israeli economy.

Ambition, a good face on things, vision, optimism, dialogue: these are positive and desirable qualities in our world.

We need entrepreneurs who aren't afraid to take chances and want to develop the economy, even if their basic motivation is personal wealth.

Working for Tshuva

Tshuva does has another side. He may be unassuming, but the style with which he built his business empire raises questions about public interests: for example, the connection between wealth and government, and when it comes to resources - their concentration, and efficient and fair allocation.

There is no question that a business must enlist the best managers.

Then there's Tshuva, who exhibits a pattern of engaging former key government, regulation and banking figures for his companies, and padding their pockets with hefty contracts. In his past and present cadre of managers, one finds the former head of the prime minister's office, Yoram Turbowicz; former bankers Moshe Amit, Ehud Shapira and Uzi Levi; former police captain Gabi Last, former regulator Moshe Tery, who served as chairman of the stock authority - and many other people who exerted great influence on Israeli decision-making, and who work today for Tshuva.

That is perfectly kosher. The problem is: what message does Tshuva send when he tailors a dream job for everyone who has had an influence on his business dealings?

The current question of gas royalties is a good example of a dilemma for the regulators.

Tshuva objects to the Finance Ministry's efforts to take a bite out of his gas profits. In his own eyes, he's not some juggernaut of a tycoon: he's a poor boy from a transit camp who achieved greatness and succeeded by virtue of his own enterprise and talent. And so from his point of view, an increase in royalties is like the theft of a prized possession.

But this is the wrong way to look at it, and erodes Tshuva's positive influence on the business world.

Tshuva's path over the last three decades provides inspiration for many enterprising people who started with nothing, and who were unable to obtain a higher education.

However, while he succeeded by using his wits, he also used the public's money, acquired through the capital market and banks, which gave him the opportunity to take chances and realize his dreams.

Now he is at a crossroads, and the path he chooses will determine his reputation in the future.

If he manages to protect his business interests and those of the investors who believed in him, and also understand that the public good requires that a bite or two be taken from the huge pie sitting in front of him, he will become a figure worthy of emulation, despite the dilemmas and conflicts standing in the way to wealth.

Avi Bar-Eli contributed to this report.