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Report Date : |
19.06.2014 |
IDENTIFICATION DETAILS
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Name : |
DAVID ARABOV
& SONS (2013) LTD. |
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Registered Office : |
3 Jabotinsky Street, Diamond Exchange, Shimshon Bldg., Ramat Gan 5250005 |
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Country : |
Israel |
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Date of Incorporation : |
26.12.2013 |
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Com. Reg. No.: |
51-474303-8 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Traders, importers,
exporters and marketers of Polished Diamonds |
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No of Employees : |
Had 4 employees in DAVID ARABOV & SONS
(1998) in mid-2013 |
RATING & COMMENTS
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MIRA’s Rating : |
NB |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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-- |
NB |
New Business |
-- |
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Status : |
New business |
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Payment Behaviour : |
Unknown |
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Litigation : |
Clear |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – March 31, 2014
|
Country Name |
Previous Rating (31.12.2013) |
Current Rating (31.03.2014) |
|
Israel |
A2 |
A2 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low Risk |
A2 |
|
Moderate Low Risk |
B1 |
|
Moderate Risk |
B2 |
|
Moderate High Risk |
C1 |
|
High Risk |
C2 |
|
Very High Risk |
D |
Israel ECONOMIC OVERVIEW
Israel has a technologically advanced market economy. Cut
diamonds, high-technology equipment, and pharmaceuticals are among the leading
exports. Its major imports include crude oil, grains, raw materials, and
military equipment. Israel usually posts sizable trade deficits, which are
covered by tourism and other service exports, as well as significant foreign
investment inflows. Between 2004 and 2011, growth averaged nearly 5% per year,
led by exports. The global financial crisis of 2008-09 spurred a brief recession
in Israel, but the country entered the crisis with solid fundamentals,
following years of prudent fiscal policy and a resilient banking sector. In
2010, Israel formally acceded to the OECD. Israel's economy also has weathered
the Arab Spring because strong trade ties outside the Middle East have
insulated the economy from spillover effects. The economy has recovered better
than most advanced, comparably sized economies, but slowing demand domestically
and internationally, and a strong shekel, have reduced forecasts for the next
decade to the 3% level. Natural gas fields discovered off Israel's coast since
2009 have brightened Israel's energy security outlook. The Tamar and Leviathan
fields were some of the world's largest offshore natural gas finds this past
decade. The massive Leviathan field is not due to come online until 2018, but
production from Tamar provided a one percentage point boost to Israel's GDP in
2013 and is expected to contribute 0.5% growth in 2014. In mid-2011, public
protests arose around income inequality and rising housing and commodity
prices. Israel's income inequality and poverty rates are among the highest of
OECD countries and there is a broad perception among the public that a small
number of "tycoons" have a cartel-like grip over the major parts of
the economy. The government formed committees to address some of the grievances
but has maintained that it will not engage in deficit spending to satisfy
populist demands. In May 2013 the Israeli government, in a politically difficult
process, passed an austerity budget to reign in the deficit and restore
confidence in the government's fiscal position. Over the long term, Israel
faces structural issues, including low labor participation rates for its
fastest growing social segments - the ultra-orthodox and Arab-Israeli
communities. Also, Israel's progressive, globally competitive, knowledge-based
technology sector employs only 9% of the workforce, with the rest employed in
manufacturing and services - sectors which face downward wage pressures from
global competition.
|
Source : CIA |
DAVID
ARABOV & SONS (2013) LTD.
Telephone 972 3 613 17 65
Fax 972 3 613 16 93
3 Jabotinsky Street
Diamond Exchange, Shimshon Bldg.
RAMAT GAN 5250005 ISRAEL
A private limited company, incorporated as
per file No. 51-474303-8 on the 26.12.2013.
We assume that subject took over the
business activities of DAVID ARABOV & SONS (1998) LTD., established 1998,
as we are informed by subject's officials that this company in the process of
turning inactive. In addition, subject is operating from same premises and
using same phone/fax nos.
Authorized share capital NIS 2,000.00
divided into -
2,000
ordinary shares of NIS 1.00 each,
of which 200 shares amounting to NIS 200.00
were issued.
1. David Arabov, 50%,
2. Mrs.
Dalia Arabov, wife of David, 50%,
David Arabov.
Traders, importers, exporters and marketers
of polished diamonds.
Operating from
offices premises, owned by the shareholders, on an area of 160 sq. meters, in 3
Jabotinsky Street, Diamond Exchange, Shimshon Building (10th floor,
Suite No. 1001-8), Ramat Gan.
Had 4 employees in DAVID ARABOV & SONS (1998)
in mid 2013. We assume subject employee no. is similar.
Financial data not forthcoming.
There are 2 charges for unlimited amounts registered on the company's
assets (all assets), in favor of Union Bank of Israel Ltd. (charges placed
January 2014).
Subject's sales figures not forthcoming.
DAVID ARABOV & SONS (1998) sales
2010 sales claimed
to be US$ 7,897,400, of which US$ 3,117,000 were for export.
Sales for the
first half of 2011 claimed to be US$ 7,000,000, of which US$ 3,400,000 for
export.
Later sales
figures not forthcoming.
Also owned by David Arabov & family:
DAVID ARABOV &
SONS (1998) LTD., as noted ceasing activities
ARABOV INVESTMENTS
LTD., real estate.
D.N. DIAMONDS (2007)
LTD., incorporated in 2007, traders, importers, exporters and marketers of
diamonds. 2010 sales US$ 57.5 million.
Based on the
Companies' Registrar, David Arabov was registered as the 55% shareholder in
D.N. DIAMONDS, and in October 2012 a change in shareholders took place,
apparently his shares were transferred to Itzhak (Tzahi) Arabov. We know that
David Arabov is still involved in D.N. DIAMONDS, though.
ARABOV GROUP LTD.,
owned by Alon and Doron Arabove, sons of David Arabov, an international diamond
company with over US$500 million in annual revenues, engaged in the entire
diamond branch – rough trading, polishing, polished dealing, jewelry
manufacturing and retailing.
DAVID ARABOV &
SONS INTERNATIONAL DIAMONDS LTD., non active.
Union Bank of Israel Ltd., Ramat Gan
Branch (No. 062), Ramat Gan.
Nothing unfavorable
learned on subject itself.
We were unable to speak with Mr. David
Arabov. We spoke to subject's secretary, who was willing to provide general
business activity, and informed on DAVID ARABOV & SONS (1998) status.
David Arabov is a
veteran and known diamond dealer. He and his family are also known to have
holdings in real estate properties.
ARABOV GROUP and
their owners/directors Alon Arabov and Doron Arabov are among the diamond
dealers involved in the recent illegal affair detailed below, were detained in
January 2012 and released by Court home under restrictions.
According to one
media article from that date David Arabov, who is Alon and Doron's father,
is also mentions as one of the persons taken for interrogation, yet in the
Tax Authorities press release he is not mentioned.
ARABOV GROUP was ranked 7th in
the 2011 list of Israel's largest polished diamonds exporters with sales for
export of polished diamonds of US$ 102 million. It does not appear in the 2012
List, though the reason is not known (it is possible that the company chose not
to be published in the list for its own motives, which is their choice).
An affair of an underground
bank shocked the local diamond branch, after in late January 2012 Police raided
the Diamond Exchange (after a long undercover operation), arrested several
individuals for investigation, caught diamonds and various assets worth NIS
millions, and blocked several bank accounts. It is suspected that a group of
people, including diamond dealers, run an illegal bank in the Diamond Exchange
compound for loans, money transfer abroad based on fictitious transactions and
exchange in volume of NIS 1 billion for several years.
The affair led to
several of reported bankruptcies of local diamond firms, a decrease of up to
70% in transactions in 2012, frozen bank accounts, and for a while to paralysis
(especially in purchase of raw diamonds) due to uncertainty among local and
foreign dealers.
In March 2012 the
Police decided to lower the profile of the investigation for a while a result
of the big pressure from the diamond branch (to stop the continuing damage
inflicted) and the Government (who is losing US$ hundred millions from decrease
in tax collection). In November 2012 the Police and Tax Authorities recommended
on indictments against the 25 suspects in the affair, among them diamond
dealers, for the said suspicions and obstruction of the investigation.
In June 2013 it
was reported that the Police resumed its raids on the diamonds branch, and
although names of suspects were not released, sources say that it is also
related to the above underground bank affair. In parallel, it is also reported
that the Tax Authorities and diamonds dealers' representatives are trying to
reach an arrangement for past debts. The Attorney General is in process of
preparing indictments.
In the end of
December 2013 it was reported that 5 diamond dealers were summoned to a hearing
(not mandatory) regarding a/m affair, prior to filing an indictment, before the
Tel Aviv District Attorney (Tax and Finance sector).
Israel's diamond
industry remarked on impressive growth in almost all trade parameters in 2013,
from the data by Israel's Diamond Administration at the Ministry of Economics:
Net export of polished diamonds rose by 11.6% from 2012, reaching US$ 6.2
billion. The market has been volatile in recent years: the branch –in Israel as
well as globally- experienced its worst depression in the 2nd half
of 2008 and 2009 due to the global economic crisis (almost an entire freeze and
collapse in sales of about 70% in the peak of the crisis), then recovered in
2010 and mainly in and fell again in 2012 (net export fell by 23% in 2012 from
2011).
Net rough diamond
exports totaled US$2.9 billion in 2013, a mere rise from 2012.
Net imports of
polished diamonds remained in similar level as 2012 (after drop by 25% in 2012
from 2011), totaling US$4.3 billion, while net rough diamonds imports summed at
US$ 4 billion, 4% up from 2012 (when it fell 13% from 2011).
The United States
continued to be Israel’s major market for polished diamonds, accounting for 37%
of the market in 2013 (35% in 2013). Hong Kong is the next largest market with
27% of exports, with Switzerland accounting for 9.3%, Belgium 7.3%, and India
accounting for 2.3% of Israel's polished diamond export.
According to the
President of the Israeli Diamonds Association, in 2010 the trade in the local
diamond sector rolled annual turnover of US$ 25 billion while total debt to the
banks stands on US$ 1.5 billion, down from US$ 2.4 billion in the eve of the
global crisis. The Ministry of Economics also assisted the local diamond
exporters by providing bank guarantees in total scope of NIS 1 billion.
In February 2009,
Israel was ranked as the world’s largest exporter of cut diamonds, followed by
India, Belgium and South Africa.
Local diamond
sector employs some 20,000 persons.
Considering the above affair and the lack of
data on subject, dealings are recommended on secured basis.
DIAMOND INDUSTRY – INDIA
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From time immemorial, India is well known in the world
as the birthplace for diamonds. It is difficult to trace the origin of
diamonds but history says that in the remote past, diamonds were mined only in
India. Diamond production in India can be traced back to almost 8th
Century B.C. India, in fact, remained undisputed leader till 18th
Century when Brazilian fields were discovered in 1725 followed by emergence of
S. Africa, Russia and Australia.
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The achievement of the Indian diamond industry was
possible only due to combination of the manufacturing skills of the Indian
workforce and the untiring and unflagging efforts of the Indian diamantaires,
supported by progressive Government policies.
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The area of study of family owned diamond businesses
derives its importance from the huge conglomerate of family run organizations
which operate in the diamond industry since many generations.
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Some of the basic traits of family run business
enterprises include spirit of entrepreneurship, mutual trust lowers transaction
costs, small, nimble and quick to react, information as a source of advantage
and philanthropy.
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Family owned diamond businesses need to improve on
many fronts including higher standard of corporate governance, long-term
performance – focused strategies, modern management and technology.
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Utmost caution is to be exercised while dealing with
some medium and large diamond traders which are usually engaged in fictitious
import – export, inter-company transactions, financially assisted by banks. In
the process, several public sector banks lost several hundred million rupees.
They mostly diverted borrowed money for diamond business into real estate and
capital markets.
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Excerpts from Times of India dated 30th
October 2010 is as under –
-
Gem & Jewellery Export Promotion Council in its
statistical data has shown the export of polished diamonds to have increase by
28 % in February 2013. Compared to $ 1.4 bn worth of polished diamond export in
February, 2012, India exported $ 1.84 billion worth of polished diamonds in
February 2013. A senior executive of GJEPC said, “Export of cut and polished
diamonds started falling month-wise after the imposition of 2 % of import duty
on the polished diamonds. But February, 2013 has given a new ray of hope to the
industry as the export of polished diamonds has actually increased by 28 %. It
means the industry is on the track of recovery and round tripping of
diamonds has stopped completely.” Demand has started coming from the US, the
UK, Japan and China. India’s polished diamond export is expected to cross $ 21
bn in 2013-14.
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The banking sector has started exercising restraint
while following prudent risk management norms when lending money to gems and
jewellery sector. This follows the implementation of Basel III accord – a
global voluntary regulatory standard on bank capital adequacy, stress testing
and market liquidity.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.60.12 |
|
UK Pound |
1 |
Rs.102.00 |
|
Euro |
1 |
Rs.81.43 |
INFORMATION DETAILS
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Analysis Done by
: |
SUM |
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Report Prepared
by : |
MNL |
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively below
average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
-- |
NB |
New Business |
-- |
This score serves as a reference to assess SC’s
credit risk and to set the amount of credit to be extended. It is calculated
from a composite of weighted scores obtained from each of the major sections of
this report. The assessed factors and their relative weights (as indicated
through %) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend (10%) Operational size
(10%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or
its officials.