Discount supermarket king Rami Levi found himself at the center of a storm this week as one former employee accused him of illegal work practices while another said his chain had fired Jewish female workers who dated Arabs.
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The fight erupted on Tuesday when Elki Alon, who had been head of the food retailer’s cellular telephony business, accused Levy of a list of transgressions in a lengthy Facebook post. Among other things, he accused Levy of covering up a sexual harassment case by a senior executive; employing unqualified family members; and violating conditions set by the Communications Ministry for its cellular license.
Levy, who has become a consumer icon as much for his rags-to-riches ascent to the top of the supermarket business as for his low prices, dismissed the accusations on Tuesday, saying they didn’t merit a response.
Wednesday, however, he responded more forcefully, publishing what he said was a threatening WhatsApp message from Alon sent to him and another executive, Ophir Attias, before Alon put his accusations on Facebook.
“More than getting the money I deserve, I would be happy to see you crucified from every tree. More than getting the money I deserve, I would be happy to see you passing time in an interrogation room and in prison. The fact is you deserve it ” the message said.
Another message from Alon demanded that Levy transfer 450,000 shekels ($114,000) to his bank account, calling the sum money he was owed and deserved as compensation for alleged mistreatment. Levy filed a complaint with police, who have opened an investigation.
Meanwhile, an unnamed former employee told Army Radio that the supermarket chain fired Jewish female workers who dated Arabs. “It’s a directive from above, who tell the human resources professionals to be on the lookout for women who date Arabs,” she said.
Shares of Rami Levy closed down 3.2% Wednesday to 180.60 shekels, even as a rival supermarket chain was experiencing deep troubles that lifted the share price of their mutual rival, Supersol. Nevertheless, an analyst who covers the stock said the damage to Levy’s name and the food retailer would likely be brief.
“We believe the damage to his reputation will be short-lived,” said Michal Alshech, who follows supermarket stocks for Excellence Brokerage, and who retained her Market Perform rating on the stock and said it could reach 200 shekels.
“It’s the nature of affairs like these to fade and be forgotten," added Alshech. "If Rami Levy continues to provide low prices, customers will continue shopping at his stores.”
Alon’s accusations of nepotism have been an issue with the retailer for some time. In addition to Attias, who is Levy’s son-in-law, Levy’s wife, Adina, works as a deputy CEO and treasurer, and was paid 1.3 million shekels in 2014.
Adina Levy’s compensation became a point of contention between Rami Levy and institutional investors two years ago. They pointed out that the compensation was 2.8 times that of Ran Efrati, the company’s legal counsel and who is not a family member. In the end, however, the institutions lost a shareholders’ vote on the matter
Levy himself, who owns 49.9% of the company, was paid 2.7 million shekels last year.