JNF Involved in Questionable Transaction
Investment in a solar energy company looks like a conflict of interests.
… JNF committed to invest up to $3 million in Arava Power Company, which sets up solar power plants in the Arava region. Not only is this a venture into a new area, it is also the first time the JNF has invested in a commercial company controlled by a non-Israeli entity: last August, Siemens of Germany bought 40% of Arava Power for $15 million.
What turns the deal from exceptional to almost mysterious is the fact that JNF has never published an official announcement of it.
… The only official report of the deal so far was sent to the company’s shareholders. According to the report, JNF became a second strategic investor in the company, after Siemens. JNF committed to invest $1.8 million immediately, and received an option on investing a further $1.2 million.
The report said that “JNF is a powerful entity in Israeli society and a highly influential body in matters concerning land.” The shareholders were requested not to divulge details of the transaction, and to enable JNF to report it, because of what were described as “internal sensitivities.”
JNF was incorporated in 1954 as a private company without share capital, and it is controlled by the World Zionist Organization. However, the fact that JNF controls 13% of the land in the state and that its representatives serve on the board of the Israel Lands Administration make it a dual entity under Israeli law, a private company subject to public norms. Against this background, the Arava Power deal raises many questions. Why, for example, was there no tender, as required in a deal of this size? Why was the deal not approved by the board of directors or shareholders meeting? Does entering a new filed of activity not require a change to the JNF’s bylaws? Likewise, investment in a commercial company controlled by a foreign entity?