The power struggle at Mizrahi Tefahot Bank (TASE:MZTF) erupted when Eyal Ofer was notified by e-mail a year ago that Avraham (Beige) Shochat, the director on his behalf, wanted to be appointed chairman of the bank. Shochat had the support of the bank's other controlling shareholder, Moshe (Mozi) Wertheim in ousting chairman Jacob Perry, but this was without the knowledge or consent of Ofer.
There has been a power struggle between Ofer and Wertheim ever since they acquired control of Mizrahi Tefahot Bank, but they kept it quiet for years, partly with the help of Perry, who was appointed specifically for this purpose. In early 2011, after Perry teamed with then-Kadima chairwoman Tzipi Livni, confrontations broke out between supporters of Ofer and Wertheim at the bank, on the grounds that the bank's chairman should not be identified with any political party, especially with the opposition party to the current government.
The steps launched to oust Perry and appoint a successor were kept hidden for a long time. Wertheim's representatives offered Shochat the position of chairman. A year ago, Shochat asked for a meeting with Mizrahi Tefahot Bank CEO Eli Yones and notified him about the scheme to replace Perry with Shochat, and that this was being carried out with Wertheim's blessing.
When Ofer learned of the scheme, he informed Shochat, through his attorney Zvi Efrat, that he could not serve another term as director of the bank and that the Ofer family would not support him.
Shochat said in response, "The initiative was not mine. I never made a putsch. I was completely honest and told all the parties about the matter. I spoke with Jacob Perry, Eli Yones, and Leora Ofer. I did not speak with Eyal Ofer because I was sure that he knew about this. Zvi Efrat also told me that he would inform him. Everyone knew where this had come from. I did not respond to the offer of serving as chairman, and the matter was dropped."
Wertheim said in response, "There is no conflict at Mizrahi Tefahot Bank on any issue, especially on this issue. Under the founding agreement between the partners, the chairman is appointed with the consent of both companies. Therefore, the idea that someone would be appointed, especially a personality like Beige Shochat, with the knowledge of the other partner, is simply impossible. Mozi Wertheim supports and will support a suitable candidate regardless of his affiliation with the company."
Moshe Wertheim owns 22.2 % of Mizrahi Tefahot Bank and Ofer Holdings Group owns 19.58%.
Last month, Perry announced his resignation as chairman of Mizrahi Tefahot Bank in order to join Yair Lapid's Yesh Atid list for the upcoming Knesset elections. The resignation took effect on October 31.
Published by Globes [online], Israel business news - www.globes-online.com - on November 4, 2012
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