Three months after Eyal Ofer, one of the controlling shareholders in Mizrahi Tefahot Bank, informed Avraham Shochat that his term as a director would not be extended, the reason behind the decision has finally emerged.

TheMarker has learned that Ofer decided to expel Shochatfrom the board after learning that the former finance minister had met with people associated with Muzi Wertheim, another controlling shareholder in Mizrahi. The two had met to discuss the possibility of naming a chairman in place of Yesh Atid-bound Jacob Perry.

Sources close to Eyal and Liora Ofer say the two viewed the meeting as an attempted "putsch" and a violation of trust.

The Ofer and Wertheim families have jointly controlled Mizrahi, Israel's fourth-largest bank, for the past 18 years. But the two sides have been ensnarled in sharp disagreements that were revealed in a Bank of Israel draft report on the bank's governance. The document was reported in TheMarker on Sunday.

The report documents how efforts to maintain a balance of power between the two families was regarded by directors as the most important factor in making strategic decisions about the bank. These decisions often came at the expense of the bank itself and even observance of the law.

In an interview with TheMarker on Sunday, Shochat denied he had engaged in anything like a putsch. "At the end of August 2011, a representative of Muzi Wertheim approached me and requested a meeting," Shochat said. "We met at a cafe and he explained to me that they were not happy with Jacob Perry as chairman of the bank and thought I was more appropriate for the post. I was asked to give an answer."

Shochat said he believed at the time that if Wertheim wanted to nominate him as chairman he should do it in coordination with Ofer, as the bank's charter gives the right to appoint a chairman to the controlling shareholders.

Shochat said he subsequently met with Perry and CEO Eli Yones to explain to them that the initiative was coming from Wertheim, not Shochat himself.

"Later I met with Liora Ofer and told her that it has to be a joint decision - I didn't speak with Eyal because I thought that Tzvi Efrat would speak to him," Shochat recalled, referring to the Ofer family representative on the Mizrahi board. "I learned that Eyal was very angry with me, but in my opinion I behaved entirely properly."