The battle over Bank Leumi (TASE: LUMI) president and CEO Galia Maor's candidacy for a directorship and the chairmanship of the bank has become more complicated. The Israel Securities Authority today blocked Maor's name from inclusion on a list of candidates for directors that will submitted to the bank's general shareholders meeting on March 11.
An opinion released by the Securities Authority, led by chairman Zohar Goshen, doubts the legal grounds for allowing Maor to submit an independent candidacy under the provisions of Article 87 of BankLeumi's bylaws (Submission on an independent candidate by shareholders), because there was no proper disclosure in the prospectus, and because the article contradicts the Companies Law (5759-1999) with regard to the date for submitting a candidacy.
The Securities Authority has no position on the applicability of Article 87. It says that if Bank Leumi regards the article as applicable, then the bank must convene a new general shareholders meeting and explain its position in an immediate notice to the Tel Aviv Stock Exchange (TASE).
The Securities Authority says that Maor's reliance on Article 87 is problematic, and that it will not allow the general shareholders meeting to take place on March 11. Bank Leumi will have to postpone the meeting by several weeks, and set a new date, in order to allow all shareholders who wish to do so to submit candidates while giving equal opportunity to all.
The Securities Authority says, "It is not possible to appoint as director a person whose candidacy was submitted after the general shareholders meeting was summoned. Our position is that, under these circumstances, it also not possible to appoint as director a person whose candidacy was detailed in the summons of the meeting, insofar as the rights to nominate him is derived from Article 87."
Meanwhile, later this week, Judge Emeritus Shulamit Wallenstein will have to comment on the request by Attorney General Yehuda Weinstein for a new discussion of her recommendation to approve Maor's candidacy for a directorship. If Wallenstein does not agree with Weinstein's position ruling out denying Maor's candidacy, the case will go to the High Court of Justice.
Last week, Weinstein ruled in favor of the opinion of Deputy Attorney General (economics and fiscal) Avi Licht that Maor cannot stand as a candidate for a directorship at Bank Leumi.
If Maor cannot present her candidacy via the appointments committee, and Article 87 blocks her as well, she may not be able to submit her candidacy at all.
Published by Globes [online], Israel business news - www.globes-online.com - on February 14, 2010
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