The Ofer family, which together with the Wertheim family holds the controling interest in United Mizrahi Bank, has asked Supervisor of Banks Yoav Lehman to oust both families from the board because of the tense relations between them.
The families, which each hold about 25 percent of the bank's share capital, have been unable to agree on various matters for a long time. Consequently, no shareholders meeting has been held in six months, and the financial reports for 2002 could not be approved. Also, the terms of employment of the new CEO, Victor Medina, could not be approved.
The relationship between the Ofer and Wertheim families has gone down hill over the last two years, and their differences are apparent at almost every board meeting. One of the current controversies pertains to the extension of the term of the external director, Avi Hefetz, who also chairs the bank's audit committee. Hefetz, who is affiliated with the Ofer family, is the CFO at Paz Oil, one of the bank's largest clients. It is estimated that Paz has taken NIS 700 million worth of loans from Mizrahi. The Wertheim family therefore feels Hefetz cannot be a member of the board because of a conflict of interests.
The senior representative of the Ofer Group at the bank, Idan Ofer, told the Supervisor that the shaky relationship between the partners might adversely impact the management of the bank and jeopardize its operations. Ofer expressed concerns that that new chairman, Jacob Perry, might find it difficult to do his job with things being as they are. The best solution, Ofer believes, is if both families leave the board and external directors are appointed, instead.
The spokesman of the Ofer Group refused to comment. Lehman said he would make no reference to any specific bank.
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