Koor's High-Tech Makeover Didn't Make It

By his own admission, Jonathan Kolber has been having plenty of sleepless nights lately. The onetime darling of the Israeli business community is working overtime trying to rescue the local empire of his mentor Charles R. Bronfman, one of the heirs to the Seagram (VO ) liquor fortune and a formidable investor in his own right. After Kolber was named CEO of Bronfman-controlled Koor Industries Ltd. (KOOR ) in 1998, he set about transforming the largely Old Economy conglomerate into one of Israel's leading New Economy players--just in time to be hit by the crash in global tech stocks and the collapse of the Middle East peace process.

Now, Bronfman says his $500 million investment in Koor has plummeted 70% in value as the company's share price has crashed with much of the rest of Israel's tech sector. ECI Telecom Ltd. (ECIL ), once one of Israel's high-tech stories and most profitable companies, has become Koor's biggest headache. It reported a $120 million fourth-quarter loss, and sales continue to decline. On Kolber's advice, Bronfman boosted his stake in ECI more than threefold, then merged it with Tadiran Telecommunications Ltd., a Koor subsidiary. Says Bronfman: "We thought ECI was going to be Israel's Nokia, but that's not going to happen."