Bank Leumi shareholder Shlomo Eliahu calls board's delay of March meeting illegal

Bank Leumi shareholder Shlomo Eliahu said late last week that the board's postponement of the bank's March 11 shareholder meeting was "illegal" - Eliahu hopes to get former Bank of Israel governor David Klein appointed chairman.

Eliahu, who owns a stake of nearly 10% in the bank, is considering his next move, which could include a petition to the High Court of Justice.

The latest news follows CEO Galia Maor's announcement last Tuesday that she would no longer be a candidate for chairman of the board. Attorney General Yehuda Weinstein had opposed the move and Israel Securities Authority chairman Zohar Goshen said he would not allow her to be a candidate on the grounds that this would violate the bank's charter.

Some observers argue that Maor, who is also a Leumi shareholder, must wait two years before becoming a board member. As a result, the securities authority directed the bank to seek legal advice.

The resulting legal opinion, issued by Omri Yadlin and Lior Hanas, said that the bank's charter authorizes shareholders to submit board candidates for consideration at a general meeting. The legal opinion, however, noted that in order to give all shareholders a chance to exercise their rights, the securities authority believes that the March 11 meeting should be postponed. As owner of a stake of at least 5% in the bank, Eliahu was entitled to call an extraordinary general meeting.

Five new board members were to be elected at the meeting, including a new chairman.

Yadlin and Hanas said notification of the meeting to all shareholders must be given at least 56 days before the event. Nominations to the board, they noted, could be made up to 35 days before the meeting. The organization Ometz, which promotes good government, had petitioned the High Court opposing Maor's chairmanship of the bank.