Sources inform ''Globes'' that the Bank of Israel will allow Bank Leumi (TASE: LUMI) shareholder Shlomo Eliahu to nominate Dr. David Klein as a director of the bank. Sources at the Bank of Israel believe that Supervisor of Banks Rony Hizkiyahu will not tell Bank Leumi not to convene the general shareholders meeting requested by Eliahu.
The possibility of holding the general shareholders meeting without putting Klein's nomination as director on the agenda, is also not being considered. The Bank of Israel expects Bank Leumi to review Eliahu's request on its legal merits, and to act as required on the basis of the bank's legal interpretation of the provisions of the Companies Law (5759-1999).
The Bank of Israel does not see the nomination as a first step by Eliahu to acquire control of Bank Leumi. The Bank of Israel believes that Bank Leumi's appointments committee will submit enough of its own candidates to the general shareholders meeting to fill all the outstanding directors' positions. In this case, it is possible that Klein will not be voted as a director, because institutional investors will vote in favor of the government's candidates, rather than Klein.
Five of Bank Leumi's fifteen directors are due to be replaced in the coming months.
Last week, Eliahu asked Bank Leumi's board of directors to convene an extraordinary general shareholders meeting in order to approve Klein as a director. This would be the first step toward appointing Klein as chairman of the bank, to replace Eitan Raff's whose term expires in May. When the bank received the request, it reported, "The board of directors will convene soon to discuss Eliahu's request."
Published by Globes [online], Israel business news - www.globes-online.com - on January 20, 2010
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