National Workers Org. pension fund expected to sue its former officials
The special manager of the National Workers Organization's pension fund, Arnon Segev, who was appointed after the fund suffered large deficits amid suspicions of irregularities in its management, is expected to file a suit against officials at the fund. Among those expected to be sued is Michael (Miki Zoller), who was the right-hand man of Abraham Hirchson at the NWO and the leading force behind the management of the organization's pension fund until 2007. Former finance minister Hirchson, who served as chairman of the NWO, is presently serving a jail term for embezzling millions of shekels in funds from the worker's union.
It is now apparent that, through a subsidiary of the NWO fund, Zoller received a special bonus for his involvement in the fund's acquisition of control of DS-Apex, now the largest brokerage firm in Israel. It was the NWO fund's largest deal to date. Zoller's bonus consisted of 4.5% of the shares of Berger Holdings (which ultimately became DS-Apex), in stock or in equivalent value in cash. Zoller opted for the cash and received NIS 2.4 million. Had he opted for the shares, they would have been worth about NIS 35 million today.
It does not appear that the payment was reported to the fund's members or to the commissioner of capital markets, insurance and savings at the Finance Ministry. The funds Zoller received that time were just one of many special payments he got from the fund, which were not known until he left his position. The payments included management fees of NIS 9 million. Zoller's total compensation from the NWO pension fund amounted to between NIS 11.5 and 12 million over four years. The bonus, it should be noted, received the approval of all relevant bodies at the NWO fund as well as the backing of an outside legal opinion.
The fund's current special manager, Segev, as well as Finance Ministry insurance and capital markets commissioner Yadin Antebi are questioning the judgment of the fund's board of directors for approving the bonus. Following losses of NIS 300 million, and the fund's subsequent nationalization by the Finance Ministry, control was taken away from NWO management. The insurance commissioner also forced the sale by the NWO fund of DS-Apex.
In response to the matter, Zoller said: "I am pleased that near the end of 2009, there are people dealing with the bonuses and salary which I received both legally and after getting all necessary approvals, in 2004. Everything I did during my period of employment [at the NWO] was impeccable and everything was done as required. The accomplishments speak for themselves, when the bodies which I headed earned hundreds of millions of shekels."