Eliahu loses: Judge postpones Leumi board vote to summer

Bank Leumi will not hold its shareholders assembly next week, as Shlomo Eliahu wanted, Judge Hila Gerstl, the Central District Court president, ruled yesterday.

Instead, Bank Leumi's board will meet only in July, following the regular annual shareholders meeting. The assembly will approve a list of candidates for the board and chairman, which the board will then approve, ruled Gerstl.

Eliahu, the largest private shareholder in Leumi with 9.6% of the bank, had demanded the meeting be held on March 11, as originally scheduled, in order to approve his candidate for chairman - former Bank of Israel governor David Klein.

In postponing the shareholder meeting, Gerstl has given the state and other private shareholders the opportunity to propose additional candidates for the board and the chairmanship.

On January 11, Eliahu asked the bank to convene a special shareholder assembly to approve Klein. The board agreed, and by law had to call the meeting within two months. In addition, the board decided to add the reelection of four present board members to the agenda.

Eliahu objected to the addition of more candidates, claiming such a change in the agenda violated regulations. The bank asked the Israel Securities Authority for its opinion, and the ISA ruled that a special meeting was required to vote on additional candidates. As such, Leumi's board decided to cancel the March 11 meeting and allow more time for other shareholders to present their own candidates - while Eliahu went to court to restore the original meeting.

The judge ruled that both sides - Eliahu and the board - acted properly, but that in this case there was a conflict between the Companies Law and the bank's own charter. Gerstl ruled that the law took precedence, but added "there are still many legal question marks concerning the process of selecting board members."