Control shareholders offer NIS 6 million to settle private-deals dispute at Tzarfati

The controlling shareholders of Tzarfati are offering the company NIS 6 million to settle a dispute over real estate deals they carried out privately, outside the public company, without first offering them to it. Shareholders of the family-owned real estate company, which trades on the Tel Aviv Stock Exchange at a valuation of nearly NIS 700 million, will vote on the proposal at a meeting scheduled for July 6.

The payment is meant for minority shareholders in response to a request to approve a derivative lawsuit filed in August 2024 against the controlling brothers, Moshe and Rafi Tzarfati, who each hold 18.5% of the company, and Maly Kairi, who holds 6.3%. The suit also names their father, Zvi Tzarfati, who allegedly knew about the “violating activity” in his role as a company director. Zvi Tzarfati ended his directorship in early June.

At issue is a series of private transactions the controlling shareholders carried out outside the public company between 2015 and 2023. Mediation took place during 2025 but did not produce an agreement. At the end of that year, Moshe and Rafi Tzarfati proposed selling the commercial assets listed in the lawsuit request to the company for NIS 60 million, but an independent committee said the purchase was not worthwhile and advised rejecting it.

The plaintiffs argue these were business opportunities belonging to the company that were concealed from it and never brought for proper approval. The proposed NIS 6 million compensation covers nine private deals, four commercial projects and five residential projects. If approved, it would retroactively validate those transactions and define the boundaries between the company’s business and the controlling shareholders’ activity. The derivative plaintiffs have urged shareholders to oppose the arrangement, saying the list of deals is incomplete and that additional transactions and assets were left out. Their lawyers said the meeting is meant to “retroactively approve all those violating transactions” and let the shareholders keep the profits, despite the company’s right to all profits generated by the deals.