The Bank of Israel and Israel Securities Authority will likely investigate the ouster of Mizrahi Tefahot Bank (TASE:MZTF) director Avraham (Beige) Sochat by the bank's CEO, Eli Yones. Relations between the two men have been tense for a long time, and reached a peak last week in an exchange of sharply worded letters and Shochat's decision to remove his candidacy for a new term as director.
Shochat told "Globes" today, "At a board meeting month ago, the list of candidates for directors was approved unanimously, and the list appeared in the press the next day, including my name as a candidate. But I then received a letter from a representative of Eyal Ofer (a controlling shareholder in the bank), informing me that he did not intend to let me renew the appointment."
"Globes": Did you try to speak with Ofer to find out the reason for his decision?
Shochat: "There were attempts, not by me, to speak with him. In any case, I didn’t try to talk with him. There's no reason for me to call. He should have called me to tell me why he does not want me to continue in my post."
According to Shochat, early this week, he received a letter from Yones demanding his resignation, even though Shochat says that the bank already knew that he would not submit his candidacy for a new term as director.
"I did not understand this letter," says Shochat. "After all, Yones had already known for three weeks that I was going to end my term. He wrote that my corresponding service at Carasso Motors Ltd. (TASE: CRSO) harmed the banks, and he included some fantastical numbers to support his claims. I did not understand why this letter was sent now. Why not two months ago? He may have discussed this matter with me once, when I was appointed a director at Carasso."
Shochat continues, "I wrote back, and then an even more vicious letter arrived. I regret that this is a model for conduct by the CEO of an Israeli bank. He can disagree with me about compensation, that's fine, but why act in this way?"
Do you intend to do anything about it?
"No. As far as I'm concerned, the story is over. I won't wage a campaign. It's just important to me that people will know what happened."
Mizrahi Tefahot Bank said in response, "We agree that this issue should be examined by the regulators. We note that the Bank of Israel was informed of the matter a long time ago, and it has the relevant letters in its possession."
Published by Globes [online], Israel business news - www.globes-online.com - on August 16, 2012
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