Hard Look / Great Karma, but What About the Bottom Line?

Shari Arison and Efrat Peled, two of the most powerful women in Israeli business had a lot of clever things to tell reporters at their offices in Tel Aviv this week.

Shari Arison and Efrat Peled, two of the most powerful and interesting women in Israeli business had a lot of clever things to tell reporters at their offices at Golda Center in Tel Aviv this week. The world is becoming increasingly crowded and polluted, they said. People have to eat and drink and be munificent with one another: Making money isn't the be-all and end-all of life.

While all this is very true, one might have expected more than a few lofty sentiments and an expensive video clip directed by Kobi Meidan, from a serious investment company that controls the biggest bank in Israel.

Arison and Peled spoke of investing in clean energy for planes and ships, but there is no such thing yet. "When you think of something, then it exists, even if we haven't discovered it yet," Arison said.

Other ventures she decided to focus on sounded equally hazy and unrealistic: food for the masses and clean-air systems in large cities - large-scale and very futuristic. Shai Agassi's electric car doesn't even count in her eyes - it's alternative energy, to be sure, but it isn't clean enough, she says.

One may applaud Arison for her courage, originality, good intentions and vision. The problem is that the business world wants a record of action and results built over the years, and that is a something neither Arison or Peled can supply. At least not now. For two and a half years, they have been madly buying up shares in Bank Hapoalim - NIS 1.5 billion invested so far. They've also been dumping managers and partners (the American shareholders in Bank Hapoalim, Shlomo Nehama as Hapoalim CEO, the Dankners as partners in the bank, and Micky Arison and the company's own workers as partners in Housing & Construction). But what have they achieved?

Arison Investments is a privately held company that does not disclose a single figure. It is therefore easy to conceal what's happening at the company: how much it owes, how much it makes, whether its revenues are growing.

But based on the conduct and performance of the two publicly listed companies that Arison Investments owns, one wouldn't want to be Arison's partner.

That's how it works in the stock market. It exposes what owners and managers might have preferred not to reveal. Bank Hapoalim, which is the most important asset in Arison and Peled's portfolio, is responsible for one of the worst management farces Tel Aviv has known and has become embroiled in a giant crisis of confidence with the marketplace. Yet Arison has done nothing about it. Bank Hapoalim stock has lost more than the benchmark index but all Arison says is: "Ask [chairman] Danny Dankner about Bank Hapoalim."

Regarding Housing and Construction, too, which has changed not only management but its logo and vision, we haven't seen any particularly impressive business results either.

Its financial statements are weak.

We can only hope that the good intentions Arison and Peled presented materialize and that the world becomes a better place to live in with their help. But it's hard to rely on that.