El Al pushes back against purchase of controlling stake by yeshiva student

National airline requests gov’t ministers reconsider sale of shares to Eli Rozenberg, as it asserts he is a frontman for his non-Israeli father, which goes against regulations

Eli Rozenberg, the new controlling shareholder of El Al (Courtesy)
Eli Rozenberg, the new controlling shareholder of El Al (Courtesy)

El Al has said it opposes a yeshiva student’s recent purchase of a controlling stake in the company, accusing him of being a frontman for his father, businessman Kenneth Rozenberg, who is not an Israeli citizen and legally cannot hold shares in the Israeli flagship airline.

A letter from El Al’s attorneys seen by The Times of Israel Wednesday requested that government ministers reject allowing the 27-year old immigrant to Israel to take control of the company.

In March, the already-financially-troubled airline was dealt an almost fatal blow by the travel-restricting coronavirus crisis, which caused El Al to cease its scheduled passenger operations and send some 5,800 of its 6,303 employees out on unpaid leave.

In an effort to salvage the company, the Finance Ministry announced a bailout and efficiency plan that included selling shares of the company.

Rozenberg’s newly minted Kanfei Nesharim Aviation purchased 42.88 percent of the company in the September 16th sale, making it the controlling shareholder as defined by Israeli regulation.

Rozenberg’s bid for control received the blessing in August of Israel’s Government Companies Authority. Now relevant ministers have to approve him getting control of the airline.

He had previously made an offer to privately buy a 44.9 percent stake in the company for $75 million, but the offer was rejected by El Al, which saw it as a play by Kenneth Rozenberg to seize control through his son. Kenneth Rozenberg is the founder and CEO of a chain of nursing homes in the United States.

In the letter, El Al said Kanfei Nesharim was effectively controlled by a non-Israeli citizen, which goes against company regulations. It also said many of Israel’s bilateral flight agreements demand that El Al be controlled by an Israeli citizen, and handing over control to a US citizen could hurt the company’s rights around the world.

El Al also noted Kenneth Rozenberg’s previous questionable business practices, including a $1.65 million settlement that Rozenberg’s nursing home chain paid to the US federal government and New York state for fraudulent billing practices.

Kanfei Nesharim lashed out against the El Al letter Wednesday, calling it “false” and saying “its sole and transparent purpose is to sabotage, obstruct and delay the transfer of control over El Al to Kanfei Nesharim Aviation.”

Kanfei Nesharim also announced that it planned to appoint new members to El Al’s board of directors and that it had already invited the former Trump administration envoy to the Middle East, Jason Greenblatt, to join as a member.

El Al planes at Ben Gurion Airport near Tel Aviv, on April 21, 2013. (AP Photo/Ariel Schalit, File)

Eli Rozenberg’s representatives have stressed that he, and only he, will be the new owner of El Al and that it will be he, and not his father, who will be running the business.

However, the funds Rozenberg used to buy the company were provided by his father.

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