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MIRA INFORM REPORT
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Report No. : |
507550.2 |
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Report Date : |
26.05.2018 |
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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Financials (as on) : |
2016 [Summarized] |
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Date of Incorporation : |
26.12.2013 |
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Legal Form : |
A private limited company |
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Line of Business : |
Traders, importers, exporters
and marketers of mainly polished diamonds. |
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No. of Employees : |
6 |
RATING & COMMENTS
(Mira Inform has adopted New Rating mechanism w.e.f. 23rd
January 2017)
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MIRA’s Rating : |
A |
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Credit Rating |
Explanation |
Rating Comments |
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A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
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Status : |
Satisfactory |
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Payment Behaviour : |
Slow but Correct |
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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
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Country Name |
Previous Rating (30.09.2017) |
Current Rating (31.12.2017) |
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Israel |
B1 |
B1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low Risk |
A2 |
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Moderately Low Risk |
B1 |
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Moderate Risk |
B2 |
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Moderately High Risk |
C1 |
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High Risk |
C2 |
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Very High Risk |
D |
ISRAEL - ECONOMIC
OVERVIEW
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Source
: CIA |
Company
name and address
DAVID ARABOV & SONS (2013)
LTD.
Telephone 972 3 613 17
65
Fax 972 3 613
16 93
Email:
alon@diamondexplorer.com
3
Jabotinsky Street
Diamond
Exchange, Shimshon Bldg.
RAMAT
GAN 5250005 ISRAEL
HISTORY
& LEGAL FORMATION
A private limited company,
incorporated as per file No. 51-474303-8 on the 26.12.2013.
Subject took over the business
activities of DAVID ARABOV & SONS (1998) LTD., established 1998, which
became inactive.
SHARE
CAPITAL
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.
SHAREHOLDERS
According
to the Registrar of Companies:
1. David Arabov, 50%,
2. Mrs. Dalia Arabov, wife of David, 50%,
Mr. David Arabov passed away on
the 09.05.2018. We are informed that all his shares will pass to his
widow (yet to be reflected in the Registrar’s records).
SOLE
DIRECTOR
The Late David Arabov is still
registered as a Sole Director.
GENERAL MANAGER
Doron Arabov (son of Mrs. Dalia
Arabov and the Late David Arabov).
BUSINESS
Traders, importers, exporters
and marketers of mainly polished diamonds.
40% of sales are export.
Operating
from offices premises, owned by the shareholders, on an area of 130 sq. meters,
in 3 Jabotinsky Street, Diamond Exchange, Shimshon Building (10th
floor, Suite No. 01), Ramat Gan.
Having 6 employees (same as in
2017, 2016 & 2015).
MEANS
Financial data not forthcoming,
believed to be financially solid.
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).
REVENUES
2013 sales
claimed to be US$ 17,000,000, 40% were for export.
2014
sales claimed to be US$ 17,420,000, 40% were for export.
2015
sales claimed to be US$ 17,500,000, 40% were for export.
2016
sales claimed to be US$ 17,000,000, 40% were for export.
2017
sales unavailable.
OTHER
COMPANIES
Also
owned by the Late David Arabov & family:
DAVID
ARABOV & SONS (1998) LTD., non-active.
ARABOV
INVESTMENTS LTD., real estate.
ARABOV GROUP LTD., owned by Alon and Doron Arabov, sons of
the Late David Arabov, an international diamond company with annual sales said
to be of several hundred US$ million, though exact figures not forthcoming,
engaged in the entire diamond branch – rough trading, polishing, polished
dealing, jewelry manufacturing and retailing.
ARABOV
INVESTMENTS LTD., real estate,
ARABOV GROUP USA DIAMOND
DISTRIBUTION CENTER INC., USA.
Arabov
family is involved on other real estate companies and projects.
BANKERS
Union Bank of Israel Ltd., Ramat Gan Branch (No.
062), Ramat Gan.
CHARACTER
AND REPUTATION
Nothing unfavorable learned on
subject.
Subject’s official did not
disclose financial data, besides sales figures.
The
Late David Arabov was a veteran and known diamond dealer. He and his family are
also known to have holdings in real estate properties.
Affiliate
ARABOV GROUP LTD. and their owners/directors Alon Arabov and Doron Arabov were
among the diamond dealers mentioned as involved in the illegal affair detailed
below. The two were detained in January 2012 and released by Court to home
under restrictions.
In
October 2015 the State Attorney filed indictments against 5 diamond dealers,
Alon Arabov being one of them (Doron was not!), for felonies of money
laundering, fabricated salary invoices and tax evasion in volumes of US$
millions. In May 2018, a plea bargain was reached, according to which Alon
Arabov will admit in tax felonies in volume of US$ 5 million and unlawful
payments of NIS 3.2 million, will pay NIS 5 million fine (also by ARABOV GROUP)
and serve 6 months community services. It should be stressed that none of
the above has effect on subject, as Alon Arabov is not involved in subject in
terms of ownership or management.
Export
(net) of polished diamonds from Israel in 2017 totaled US$ 4,478 million, some
4% lower than in 2016 and 2015 (US$ 4,675 million and US$ 4,996 million,
respectively), and well below 2014 (US$ US$ 6,269 million) and from its peak on
the eve of the crisis in the branch, with export of polished diamonds of US$ 7
billion.
The
diamonds market has been volatile over the last years after experiencing its
worst depression due to the global economic crisis, then recovered in 2010 but
fell again in 2012. According to Israel's Diamond Administration (IDA) at the
Ministry of Economics, profit margins have been decreasing due to smaller gaps
between rough (increasing) and polished (decreasing) diamond prices.
In addition, the local diamond
sector has been negatively affected by other significant factors: the
production of counterfeit diamonds, whose quality keeps improving (harming the
raw diamonds market), the entrance of new rules by the local Tax Authorities on
the Diamond Exchange for enforcing money laundering, and the "underground
bank" affair – as below.
As a
result, local diamond dealers report on difficulties in executing transactions
and bad atmosphere in the branch. Signs of recovery appeared towards the last
quarter of 2016 – mainly due to the growing stability of the market and the
industry’s agreement with the Israel Tax Authority in December, yet the market
is still volatile, as witnessed with the endurance of the depression trend
during most of 2017.
Export
(net) of rough diamonds fell 10.4% in the first 9 months of 2017 (compared to
the parallel period in 2016), reaching US$ 1,796 million (summed up to US$
2,702 million in all 2016, 23% higher than 2015).
Net
imports of polished diamonds in 2017 totaled US$ 2,700 million, compared to US$
3,282 million in 2016.
Net
import of rough diamonds summed at US$ 3,246 million in 2016, up 16.7% from
2015, and reached US$ 2,089 million in the first 9 months of 2017, down 11.6%
compared to 2016.
The
United States continued to be Israel’s major market for polished diamonds,
accounting for 45% of the market in the first 9 months 2017 (was 39% in 2016).
Hong Kong is 2nd largest market with 30% of exports (26% in 2016),
followed by Switzerland 9% (7%), Belgium 8% (8%), and the rest of the world
account for the remaining 8% of Israel's polished diamond export.
An
affair of an "underground bank" (known as the "Check List"
Affair) 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, and for a while to paralysis
(especially in raw diamonds purchase) due to uncertainty among local and
foreign dealers. Later in 2012 the Police decided to lower the profile of the
investigation for a while (pressure from the diamond branch due to the
continuing damage inflicted and the Government (losing US$ hundred millions
from decrease in tax collection), but resumed investigation in 2013.
In
mid-2014, based on the Police and Tax Authorities recommendations, the State
Attorney started the process of filing indictments against central defendants
in the affair, initially against dealers who provided foreign currency services
to the "bank". Since late 2015 indictments for severe charges pressed
against 11 diamond dealers and their firms for tax felonies committed and
issuing fictitious invoices in volumes of millions US$.
As
noted above, in the matter of one of the prosecuted, Alon Arabov, a plea
bargain was reached recently. Other cases are pending.
SUMMARY
Good for trade engagements.
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
INR 68.26 |
|
|
1 |
INR 91.22 |
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Euro |
1 |
INR 79.88 |
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ILS |
1 |
INR 18.92 |
Note :
Above are approximate rates obtained from sources believed to be correct
INFORMATION DETAILS
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Analysis Done by
: |
VAR |
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Report Prepared
by : |
KET |
RATING EXPLANATIONS
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Credit Rating |
Explanation |
Rating Comments |
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A++ |
Minimum Risk |
Business dealings permissible with minimum
risk of default |
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A+ |
Low Risk |
Business dealings permissible with low
risk of default |
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A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
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B |
Medium Risk |
Business dealings permissible on a regular
monitoring basis |
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C |
Medium High Risk |
Business dealings permissible preferably
on secured basis |
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D |
High Risk |
Business dealing not recommended or on secured
terms only |
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NB |
New Business |
No recommendation can be done due to
business in infancy stage |
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NT |
No Trace |
No recommendation can be done as the
business is not traceable |
NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.
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 are as follows:
·
Financial
condition covering various ratios
·
Company
background and operations size
·
Promoters
/ Management background
·
Payment
record
·
Litigation
against the subject
·
Industry
scenario / competitor analysis
·
Supplier
/ Customer / Banker review (wherever available)
This report is issued at
your request without any risk and responsibility on the part of MIRA INFORM
PRIVATE LIMITED (MIPL) or its officials.