Depriving the banks of control of TASE (Tel Aviv Stock Exchange) and giving it to foreign concerns is creating a sharp dispute between the TASE's management, headed by CEO Ittai Ben-Zeev, who initiated and promoted the measure, and Bank Hapoalim (TASE: POLI). The conflict escalated yesterday, with Ben-Zeev accusing Bank Hapoalim in an official letter of using other parties to do its bidding and misleading Knesset members in order to safeguard its profits.
Bank Hapoalim, managed by CEO Ari Pinto, asserts that Ben-Zeev is being non-objective and evasive in trying to sell 20% of the shares in the TASE to Manikay Partners, a foreign fund, at a company value of over NIS 500 million, plus additional shares to several international investors and the public.
Ben-Zeev is alleging that Yedid The Association for Community Empowerment executive director Ran Melamed and Movement for Freedom of Information executive director Nirit Blayer, who sent Knesset members a critical letter on the subject of publication of information about the transfer of TASE shares to Manikay, "are misleading the members of the Knesset Finance Committee," because although "the letter sent purports to be an independent statement by two non-profit organizations, the information we possess indicates that the letter, for which Bank Hapoalim is responsible, is designed to promote the narrow interests of Bank Hapoalim, not the public good."
"The bank has no need for concealment"
Bank Hapoalim heard about Ben-Zeev's accusation of "concern about misleading public representatives and obstruction of the Knesset's work," from a senior Bank Leumi (TASE: LUMI) officeholder whose father was a former Bank Hapoalim officeholder. Bank Hapoalim responded, "It is unfortunate that the TASE CEO is responding non-objectively, evading an answer to the question, and not disclosing the TASE sale agreement, which is liable to increase fees for TASE customers. Someone who talks about lack of transparency should fully disclose the TASE sale agreement - something that is important to the public interest. Bank Hapoalim stated its objections directly and in writing to the TASE CEO; it has no need to hide behind any non-profit organizations."
The extraordinary and acrimonious dispute is the result of a letter from the Yedid and the Movement for Freedom of Information concerning "publication of information about the transfer of shares in the TASE to Manikay" addressed to Ben-Zeev, TASE chairperson Amnon Neubach, Israel Securities Authority chairperson Anat Guetta, MK Eitan Cabel (Zionist Union), members of the Knesset Economic Affairs Committee, Finance Committee chairperson MK Moshe Gafni (United Torah Judaism), and Special Committee for the Transparency and Accessibility of Government Information chairperson MK Stav Shaffir (Zionist Union) and other members of the committee.
The letter, which referred to the TASE as a monopoly, called for "disclosing the information concerning the TASE shares and the process of selling them to all citizens of Israel, including any agreement, document, or appendix pertaining to the process, and rules and proceedings conducted involving it."
"Concern about misleading public representatives"
In response to this letter, which was sent to MKs and Bank Hapoalim deputy CEO and chief legal advisor Yael Almog, among others, the TASE sent an acerbic letter addressed to the MKs entitled, "Concern about Misleading of Public Representatives and Obstruction of the Knesset's Work."
In the letter, Ben-Zeev wrote, "This conclusion is supported, among other things, by the fact that the letter was also addressed to Bank Hapoalim deputy CEO and chief legal advisor Yael Almog and the fact that the TASE received a similar letter from the bank at almost exactly the same time. It is therefore suspected that Bank Hapoalim chose to act through Yedid, which is supposed to act with complete transparency on behalf of the public interest, without bias, and certainly without any affinity to interested parties. Use of the organization by Bank Hapoalim and the fact that the bank chose to act through the organization is grave enough in itself."
Ben-Zeev added, "The sale of 20% of the TASE shares to Manikay, an investor with vast experience in investing in stock exchanges throughout the world that have undergone structural change, is laying the groundwork for transferring a third of the TASE shares to the general public in order to address the Finance Committee's main concern about approving the law - the continued control of the TASE by the banks… The transaction is creating the infrastructure for bolstering competition in the local capital market and cutting costs for investors among the public… In contrast to allegations about a lack of transparency, the TASE published the structure of the deal for selling the shares in a press release. The press release received extensive media coverage."
Yedid stated in response, "Our letter was sent to a number of distribution lists, as we always do when we write a letter of great public importance… There are indeed quite a few bank employees on the lists, including CEOs and other employees. In any case, these included almost all the banks in Israel, as well as insurance companies, investment houses, and so forth. (the name of Almog) appeared on the list, and she received the letter, as did at least 100 representatives of the financial system and the government system dealing with the issue, including various parties in the Ministry of Finance and the Securities Authority. Saying that we and other organizations had ulterior motives indicates only one thing - the low ethical standards of the TASE CEO and the unfitting mode of expression employed instead of citing facts and exposing the relevant documents as we requested."
Yedid added that Ben-Zeev's conduct was unacceptable. Among other things, the organization cited, "your interests (Ben-Zeev, R.S.) and those of the TASE's management in not publishing the full figures about the agreement involved. It is time to also apply transparency to the TASE."
Published by Globes [online], Israel business news - www.globes-online.com - on May 22, 2018
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