TASE Chairman Quits, Blaming Israel Securities Authority Chief for Interfering in Management of Exchange

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A bruising battle between the Tel Aviv Stock Exchange and the Israel Securities Authority went public yesterday after TASE chairman Sam Bronfeld announced he was quitting.

“I am forced to resign from my position due to the ISA’s continued hostile takeover efforts directed at the exchange,” Bronfeld said in his resignation letter.
He criticized the ISA for holding the stock exchange responsible for the damage to Israel’s capital market − damage that he blamed on excessive regulation. The chairman accused the ISA of exceeding its role as regulator by interfering directly in the management of the exchange and “harming its proper management.”

Bronfeld’s resignation comes just a week after the announcement by TASE CEO Ester Levanon said she would step down at the end of the year. On Wednesday, TASE’s executive vice president and chief information officer, Yoni Shemesh, said he, too, would leave by the end of this year.

ISA Chairman Shmuel Hauser responded to Bronfeld’s resignation by saying that the TASE chairman and CEO Levanon “need to go home.”
“The two have been in their seats for three decades,” said Hauser. “The time has come for new blood.” He concluded, “We need to bring energetic, talented and creative people who will transform the exchange into an attractive place for companies and investors.”

Hauser asserted that Bronfeld and Levanon had “done nothing” for several years at the exchange while still collecting excessive salaries.

“The exchange in Tel Aviv is a national resource and it should be returned to its important place in the Israeli economy,” said Hauser. “I am convinced that under the leadership of new management, the exchange will proceed onto a new path of growth and development .”

But Hauser also acknowledged that the ISA needed to work on adapting financial regulations to meet market conditions.

The TASE has suffered a sharp drop in trading volume in the past year despite efforts such as extending the trading day by an hour and bringing more liquidity to the market.

The TASE also put on a flaccid performance compared to most of the developed world’s stock markets, which have been touching record highs. The contrast is all the more stark as the Israeli economy has performed better than most of the Western world’s economies. A failed effort to get the TASE included into the MSCI Europe index earlier this year also marked a setback for the bourse.

Bronfeld announced his resignation during a board meeting discussion about forming a search committee to find a CEO to replace Levanon. Bronfeld was recorded in the minutes as saying, “I read ... Hauser’s letter [about the search committee] and I am not interested in being on the committee that will find a new CEO.” Bronfeld denied reports last week alleging that Levanon was resigning because of tensions between the two. Instead, he claimed during the meeting that Hauser had precipitated her resignation.

“I don’t understand how after so many years that the exchange has been running, Hauser succeeded in threatening Ester [Levanon] so that she would leave her job ... and now continues to sling mud at the rest of the people at the exchange.”

Tel Aviv Stock Exchange chairman Sam Bronfeld. Credit: Ofer Vaknin