Conspiracy of silence in ousting of Leumi director

Prof. Haim Levy Photo: Wikipedia
Prof. Haim Levy Photo: Wikipedia

Former director Prof. Haim Levy wrote a letter criticizing the way the  bank's board does business, but no one, including Levy, is talking about what was in the letter.

Why did Prof. Haim Levy find himself pushed off the Bank Leumi board of directors after only one term, and what did he write about the board's conduct? Levy, an esteemed international specialist, former Dean of the Hebrew University of Jerusalem School of Business, Israel Prize Laureate in 2014, and EMET Prize winner in 2007, who was rated one of the most productive financial scholars in the world in 1953-2002, wrote textbooks studied by thousands of students, and is an acclaimed lecturer who numbers directors, managers, advisors, and senior executives among his students.

Last summer, it was learned that two candidates had reached the final selection for external director at Bank Leumi: Tzipi Samet and Levy. Each of them was a director at Bank Leumi. Samet was more comfortable for management, while Levy regularly asked tough specific questions and demanded figures. Levy is a strong-willed man who presented economic models and said what he thought, letting the chips fall where they may. Samet stayed on the board, while Levy was sent packing.

In his final board meeting, Levy gave Bank Leumi chairperson David Brodet and each of the directors a detailed letter several pages long describing the board's work. He expressed incisive criticism of the board's conduct, saying that its discussions were not sufficiently penetrating; its agenda was crowded, overloaded with subjects, and did not allow for discussion; and material was submitted at the last minute, leaving the directors insufficient time to study it. In another part of his letter, he wondered how he, one of the world's best-known economic scholars, had found himself competing head-to-head with Tzipi Samet.

In Levy's view, as can be gathered from a few sentences, those who voted against him at the general meeting were mainly some of the foreign investors. These investors are usually not inclined to interfere in the Israelis' selection, and furthermore, as far as is known, had never voted against a candidate. In his letter, Levy wondered whether someone had enlisted the group and organized it against him, or in favor of the person he ran against.

Directors asked about the letter evaded the question. "And if they send me to do a polygraph test, what will I do?," they said. Levy also felt embarrassed when asked about it. Although he stands behind everything he wrote and sounds angry, he refuses to says what was in the letter, because under his agreement with the bank, he is committed and obligated to maintain total confidentiality 'to the last day.'

Full information about the letter reached former Israel Securities Authority chairperson Shmuel Hauser. Despite the problems revealed in the work of a major public company, Hauser decided not to ask questions. The letter was also sent to Supervisor of Banks Hedva Ber. What happened? It is unclear. It is said that some of what was in the letter was already known to the Bank of Israel Banking Supervision Department, and some of that had been discussed and corrected. Other parts had been examined and comments had been made about them to the bank's management. No one is talking about it. This silence speaks volumes.

Published by Globes [online], Israel business news - www.globes-online.com - on April 23, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

Prof. Haim Levy Photo: Wikipedia
Prof. Haim Levy Photo: Wikipedia
 
 
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