Text size

The dispute between the Bank of Israel and Bank Hapoalim has underlined the intriguing power struggle surrounding the bank's controlling shareholder - Shari Arison, the richest woman in Israel. This struggle involves two of the senior executives closest to Arison: Efrat Peled, CEO of Arison Holdings, and Iris Dror, Chief Language and Communication Officer at Arison Group. Both women are Arison's appointed representatives to Hapoalim's board.

Last Friday the struggle ended with the ousting of Dror from the Arison team. After eight years with the group, Dror is leaving her post and is expected to leave the bank's board, too.

The dispute between Peled and Dror climaxed about two weeks ago, when a stormy argument erupted between the two women at the Arison Group's offices.

Peled's victory is more than just the strengthening of her status in the group and with Arison. It is also a victory for the militant spirit in the Arison Group and on Hapoalim's board over the placating direction that Dror had advocated. Dror's strategy sought to avoid a confrontation between Hapoalim and the Supervisor of Banks. Even so, Dror's path has proved its wisdom, ultimately leading to agreement with the central bank.

Peled, who is considered a close associate of Hapoalim chairman Danny Dankner, has led a more aggressive stance in the conflict between Hapoalim and the Bank of Israel. She felt Hapoalim must not compromise and should keep fighting to the finish. Peled pressured Arison to exert her position as the bank's controlling shareholder in meetings with Bank of Israel Governor Stanley Fischer, letting him know that unless he had a specific reason for ousting Dankner, she had no intention of replacing him.

Peled also led Hapoalim's board in opposing the establishment of a committee to find a new CEO. She contended that appointee Zion Keinan had worked for Hapoalim for 30 years, including as deputy CEO, and if Supervisor of Banks Rony Hizkiyahu had any objections to Keinan's nomination as CEO, he could have voiced them in the past.

Dror, on the other hand, had told Hapoalim's board that the bank should acquiesce to Hizkiyahu's demands, because if the bank did not appoint a committee of its own volition, the central bank would force it to do so. Yair Orgler, a former chairman of the Tel Aviv Stock Exchange and an external director on Hapoalim's board, sided with Dror.

It now turns out that Dror was right, as Hizkiyahu gave Hapoalim an ultimatum to appoint a search committee for a new CEO, and last week a committee was indeed formed.

The differing stances of Dror and Peled were also fleshed out in the drafting of Arison's assertive address earlier this month, in which she accused the Bank of Israel of McCarthyism. Dror felt Arison's speech should have been more moderate, whereas Peled supported its accusatory tone. Peled also supported Dankner's efforts to involve political figures in the dispute, particularly Knesset Finance Committee chairman Moshe Gafni, and Knesset Economics Committee chairman Ofir Akunis, but ultimately Dankner and Peled decided to comply with Fischer's request to postpone committee discussions of the issue.

"I support any compromise that befits all those involved in the matter of the Supervisor of Banks," responded Arison. "There is no connection between Dror's termination of her position and the affair between Hapoalim and the Supervisor of Banks. The details in the news item are a pile of lies and misinformation."