Speculation is growing in Israel that the global business empire of Russian-born oligarch Arkady Gaydamak may be in jeopardy - and Portsmouth football club, owned by his son Alexandre, could be caught up in the financial mayhem.
On Tuesday, Ocif Investments, an Israeli real-estate company owned by Mr Gaydamak, was placed into temporary receivership by a Tel Aviv court, although United Mizrachi Bank, the company's principle creditor, subsequently gave Mr Gaydamak a week to repay Ocif's debts. The Russian-born oligarch also announced that he would liquidate all his Israeli assets except the Betar Jerusalem football team.
In addition to Ocif, Mr Gaydamak's assets include G Willi-Food Investments, Gilon investments and Ameris Holdings. Mr Gaydamak was also forced personally to underwrite NIS 15.5 million (£2.5m) earlier this week after an Israeli bank bounced a cheque for that amount written by Ameris.
Gaydamak, who is believed to have global assets worth $3 billion (£1.5bn), strenuously denied any liquidity problems and said that he was selling his Israeli holdings because "it is impossible to succeed in Israeli business".
However, Israel's economy bucked the global trend in the first half of 2008 with growth of 5.6 per cent in the first quarter and 4.2 per cent in the second quarter. Yet the market value of Mr Gaydamak's Israeli investments has shrunk from NIS 1 billion (£157m) to NIS 297 million (£47m) over the past year.
Yossi Segev, the lawyer charged by Mr Gaydamak with selling his Israeli assets, says that his client does not understand Israel's business culture. "He has suffered because he is an outsider," Mr Segev explained. "Most Israeli businesspeople take bank loans when they acquire companies so that the banks will subsequently look after them. Gaydamak did not know this and brought in cash from out of the country to buy his businesses."
Mr Gaydamak's difficulties bring into question the financial future of Premier League side Portsmouth, acquired by his son Alexandre for £32 million in 2006.
Alexandre Gaydamak, 29 at the time of purchase, steadfastly denied using his father's money to buy the club but even so, the two have many business interests together including ownership of the Regional Bank of Development in Moscow.
Mr Gaydamak senior, 56, was born in Moscow and arrived in France in the early 1970s, finally settling in Israel in 2005 after France issued a warrant for his arrest for alleged tax evasion and arms-deal irregularities with Angola.
In Israel he has been questioned by police regarding money-laundering allegations, while using his popularity as owner of Israeli champions Betar Jerusalem as a platform for a political career.
While his Social Justice party plans to run in November's municipal elections and the next Knesset elections, Mr Gaydamak's personal campaign to become Mayor of Jerusalem is floundering. A recent poll showed Gaydamak winning 8 per cent of the votes for Jerusalem mayor, down from 15 per cent in August.
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