Supervisor of Capital Markets, Insurance and Savings Prof. Oded Sarig will likely approve the acquisition of the controlling interest in Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL), Israel's largest insurance company, by Shlomo Eliahu. Sarig and Eliahu will hold a special meeting to discuss the merger in a few weeks.
The meeting is part of the Ministry of Finance's Capital Markets, Insurance and Savings Division's examination of Eliahu's reliability as Midgal's controlling shareholder, after he admitted to transferring money abroad without reporting it to the Israel Tax Authority as required.
Regulators will convene after Eliahu's meeting with Sarig and make their decision.
Although Eliahu's meeting with Sarig is not called a hearing, it is tantamount to one, as Eliahu will have to provide clarifications about his failure to report the money transfers out of the country.
A meeting with the regulator is normal when approving the controlling interest in a financial institution, let alone the country's largest insurance company. Eliahu already has control permits for Eliahu Insurance Company Ltd. and for Bank Leumi (TASE: LUMI) and Union Bank of Israel (TASE: UNON), in which he is part of the controlling cores.
The Capital Markets Supervision Department and the Ministry of Justice, both of which must approve Eliahu, reportedly do not see eye-to-eye about his tax violations. The Capital Markets Supervision Department considers Eliahu as fit to control an insurance company, but others consider approval of the transfer of control of Migdal to him as sending a problematic legal and moral message to the market. Sarig will make the final decision.
Published by Globes [online], Israel business news - www.globes-online.com - on June 4, 2012
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