The Supervisor of Banks, Yoav Lehman, was all but stunned. Accustomed to showers of criticism by bankers and shareholders for interfering with their business, he could not believe his ears when Idan Ofer asked him to oust the controling shareholders, including Ofer himself, from the board of United Mizrahi Bank.
But Ofer had a very sensible explanation. He told Lehman that, for three years now, the poor relationship between the controling shareholders, the Ofer and Wertheim families, has been impairing the decision-making process and might even reflect on the management, which has so far dealt well with the rift at the work place.
Ofer's main concern is that the new chairman, Jacob Perry, who has already realized how deep the schism between the shareholders is although he was only appointed eight months ago, would not survive too long on the job and the bank would be forced to go looking for a new chairman yet again.
The rate at which new chairmen are appointed for Mizrahi's board is one of the results of the tension between the shareholders. Over the past five years, the bank has seen six different chairs: Muzi Wertheim, David Brodet, Avi Wertheim, Idan Ofer, Avihu Ben-Nun and Perry.
Ofer's plan looks constructive, and he is even willing to pay a personal price and step down from his seat on the board. But the Supervisor will not be quick to endorse the request - and not because he isn't in favor. On the contrary, if he could, he would implement it not only in Mizrahi but also in other privately owned banks. But legally, Lehman does not have the tools to prevent controling shareholders who invested their money in stocks from having a say and overseeing their investment.
Lehman's only avenue is to monitor the decision-making process at the bank up close and try to identify failures arising from the rift between the shareholders. If he finds such failures, he will not hesitate to enforce the necessary sanctions.
Ofer's request puts the Supervisor in a hard spot. If the bank loses ground because of the dispute, Lehman may be required to explain why he did not embrace the request of one of the shareholders, who cautioned ahead of time that the clash between the shareholders might be pushing the bank off track.
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