On September 16th, an aviation company named Kanfei Nesharim took a 42.85% stake in Israeli flag carrier El Al. It’s been just over a week, and there is already some controversy over the airline’s ownership structure as directors of El Al’s board are appealing to members of the Israeli government to re-evaluate the situation.
Who is controlling El Al?
Upon taking a majority share in El Al, aviation company Kanfei Nesharim declared that it was the controlling stakeholder, and the airline was a private company incorporated in Israel. It also stated that the carrier was under the full and exclusive ownership and control of 27-year-old Israeli citizen Eli Rozenberg.
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However, according to FlightGlobal, El Al says it has submitted a letter over concerns that Rozenburg is not actually the controlling holder of Kanfei Nesharim. The message went to three ministers acting on behalf of the Israeli government’s special ‘golden’ share in the airline.El Al operates a fleet of 15 787 Dreamliners. They are a mix of the -9 and shorter -8 variants. Photo: El Al
The controversy surrounds a non-Israeli citizen
At the core of the issue is El Al’s understanding that the controlling holder of the company is, in fact, Kenny Rozenberg – the father of Eli. While Eli holds Israeli citizenship, his father Kenny does not.
Israeli media outlet Globes reports that a legal representative of the airline’s board of directors has written a letter to Minister of Defense Benny Gantz, Minister of Transport Miri Regev, and Minister of Cyber and Digital Matters David Amsalem. The letter claims that Eli Rozenberg is a ‘straw man’ acting as a proxy for his father. “We will ask you to consider the request for a permit to control El Al,” a portion of the letter states.
The letter sent by El Al to the cabinet ministers says the following:
“According to the law and El Al’s regulations, control of El Al must always be in the hands of a citizen and resident of Israel. According to the information obtained by El Al, Kanfei Nesharim is a company controlled by American businessman Kenny Rozenberg, who is not a citizen or resident of Israel. In order to circumvent the legislative restrictions, the shares of Kanfei Nesharim are registered in the name of his son Mr. Eli Rozenberg, a young man who is 26 years old who lacks independent means and lacks business experience and all this is to create the false appearance as if the controlling shareholder is so to speak an Israeli resident.” -Letter from El Al Board of Directors as reported via Globes
Deal not yet finalized
Knafaim Holdings Ltd., El Al’s current controlling shareholder, is now attempting to prevent the transfer of control to Eli Rozenberg. Control of El Al has yet to actually be transferred to Rozenberg as approval from the three government ministers is required.
Globes notes that Eli Rozenberg remains a somewhat mysterious figure as he has yet to speak to the media about his intended role. Sources report that some of the advisors he has hired have yet to meet him.
As for his father, Kenny Rozenberg is a healthcare entrepreneur and the founder and chief of a New York company named Centers Health Care.
Do you think the Israeli government ministers involved will approve the transfer of control to El Al’s new owners? Let us know your thoughts in the comments.