State wipes out NIS 65 million debt owed by billionaire — report
A NIS 65 million ($20 million) debt owed to the state by billionaire Idan Ofer was wiped out by the Justice Ministry, Channel 13 news reported on Sunday evening.
According to the report, the ministry decided to clear Ofer — estimated to be worth $6.5 billion — of the amount owed over fears that they could lose a legal battle against the billionaire businessman in court.
The amount owed dates back to 2017, when Israel passed a law mandating payments from companies using the country’s natural salt water, reported Channel 13. But the Dead Sea Works company controlled by Ofer reportedly argued that it did not have to pay anything beyond the original deal its parent company, Israel Chemicals (ICL), signed in the 1960s.
The Justice Ministry was convinced to back away from its demand that ICL pay the NIS 65 million payment since it was not certain that the retroactive claim would hold up in court, said Channel 13.
According to Calcalist, the Dead Sea Works’ total debt to the Water Authority stood at NIS 83 million earlier this year, but the majority of that will now be wiped out.
In June, the Water Authority issued an annual license to ICL allowing its Dead Sea Works factory to extract more water than last year out of the Dead Sea.
The authority will allow the Dead Sea Works to pump 445.8 million cubic meters during 2021, up from 439 million cubic meters last year — the first year during which pumping was determined by a government license.
In response to the Channel 13 report, the Water Authority told the TV network that it had long recommended that Mekorot, Israel’s national water company, hold off on attempting to collect fees linked to the “concession area” included in the long-ago deal with ICL, “since the issue is being clarified by the Justice Ministry.” The Water Authority added that in other areas, Mekorot has “collected in full tens of millions of shekels in payments” owed due to the 2017 law.
Ofer’s name was among the hundreds of Israelis mentioned recently in the Pandora Papers, a leaked collection of millions of documents detailing the financial secrets of the rich and famous around the globe. The papers largely deal with millionaires and billionaires who have stashed their wealth in offshore tax havens and set up layers of shell companies to distance themselves from certain activities.
According to the documents, Ofer is said to own a company headquartered in the Virgin Islands named Better Place, whose holdings include a 50-meter yacht that was used as a guarantee for a 15 million euro loan from Credit Suisse in 2015.
Sue Surkes contributed to this report.