Taking Stock / Raichman Ltd.

Who really controls the Tnuva cooperative? How are decisions made? How much money does it really make? Whose interests does it serve? How much value does it generate? Who gets it? Shareholders? Producers? Customers? Workers? Its management?

Are the tremendous amounts it spends on advertising generating sensible yields? How much did it invest in branding and advertising, at the expense of profitability? What kind of salaries are paid over there and how do they compare with other food manufacturers? How much does its CEO make?

As of today, we are all supposed to know, after the Tnuva assembly - comprised of representatives of all the 600 moshavim and kibbutzim that own the cooperative - convenes.

Yet these representatives are in for a surprise today. The CEO, Arik Raichman, decided to delay incorporating the cooperative as a limited company that would publish full financial statements for the general public's edification and maintain transparency in its decisions and actions.

Three years ago, a legal controversy swirled about fellow food cooperative Blue Square and the shareholders managed to force out its chairman, Benny Gaon. At the time, we wondered whether much the same would happen to Tnuva one day: One morning the members might get up, down a coffee, pad over to the phone and demand their money, asking whether their interests were the same as the management's.

To this day, Gaon is fighting the Co-op's demand that he return money gained from warrants. He claims that he did not try to take over the Co-op, but acted solely to further its best interests. He rehabilitated it, he says, and meant to privatize it, too. But the bottom line is that he isn't there any more.

Irked at the comparison, Raichman pointed out our mistake: I am not following in Gaon's path, he said, I am spearheading a transparent effort to transform Tnuva into a limited company. I am not demanding options for myself, he fumed, and I am not trying to consolidate my control over Tnuva, nor will I join forces with any group trying to take it over.

We gave Raichman the benefit of the doubt and waited. Two years ago, Raichman summoned us to a meeting and announced that the first stage in his grand plan had been executed. Tnuva's shares had been allocated to its members, he said, the kibbutzim and moshavim. The next stage, the last, would be to convene the Tnuva assembly, which meets every four years, and incorporate the cooperative as a limited company. As Tnuva has 620 shareholders, the incorporation would automatically have made it publicly traded.

That's not the plan

December 2003 has arrived, and Tnuva's assembly will be convening today. But the suspicion we have been harboring for many long months is now all but certainty: Raichman does not mean to turn Tnuva into a limited company today. Nor does he mean to announce a stock issue to the general public, or any move that would transform it into a transparent entity.

He has other plans: First to find a strategic partner, and only then to incorporate it. Finding a partner and incorporation are moves that must be made together, he told Haaretz in an interview on Tuesday.

But wait, who will find a strategic partner for Tnuva? Who will decide which is the most suitable candidate? Can one be found now? How long will it take? Is there a timetable?

We can't say, we can only guess. We can explain that the moves are complex ones that depend on the circumstances. But what is certain is that, since Raichman is leading all the moves to find a strategic or financial partner himself, any decision to incorporate Tnuva and render it transparent depends on him deciding to do so.

Naturally, a few personal questions come up, such as the CEO's status after bringing in the putative partner. Will Raichman remain? Go? Will he get options? Will he be part of the controlling interest?

Haim Ramon and Udi Vardy-Zer are answering the very same questions right now on an entirely different matter - namely, the sale of Housing & Construction to the Arison group. And Benny Gaon is being asked to answer remarkably similar questions about his options.

So far, Raichman has shown exceptional talent and virtuosity in running Tnuva, in maneuvering the kibbutzim and moshavim that ostensibly control the co-operative, in dealing with the media, the workers, and all the rest of the bodies with which he comes into contact. Nor has Tnuva's tremendous advertising budget hurt his relations with the media, we may assume.

But he should learn from Gaon, until recently the omnipotent king of the business sector. Gaon also believed his business achievements would free him to do as he pleased with the Blue Square Co-op. He never thought the niggardly little shareholders could so much as nip at his ankles, let alone lead to his ouster and disgrace.

They say that Raichman carefully nurtures his public image as a simple farmer, a man of the land. Behind that facade lurks a cunning, wily businessman thinking five steps ahead. He may soon have to work even harder to prove that his steps to morph Tnuva from a co-op into a limited company aren't limited by the scope of his personal ambition.