State to Sell Last Holdings in Bank Leumi

Zvi Zrahiya
Eti Aflalo
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Send in e-mailSend in e-mail
Zvi Zrahiya
Eti Aflalo

The road is open for the state to sell its last holdings in Bank Leumi.

Yesterday the Knesset Finance Committee approved the bank's final privatization in a revote on the Finance Ministry's request to sell the state's remaining 11.45% stake.

The committee had approved the sale a few weeks before, and voted again yesterday after Leumi reached a wage agreement with workers. Committee chairman Moshe Gafni explained that the second vote was needed because when the first vote was held, the bank had yet to reach an agreement with employees over wages, and now that the deal has been signed the sale can proceed.

"I am pleased the agreement was signed, and it will guarantee the rights of employees," said Gafni.

Five MKs voted in favor of reapproving the sale, and three objected.

Voting in favor were Gafni (United Torah Judaism ), Zion Fanian (Likud ), Fania Kirshenbaum (Yisrael Beiteinu ), Amnon Cohen (Shas ) and Zeev Elkin (Likud ).

Voting against were Shai Hermesh (Kadima ), Raleb Majadele (Labor ) and Shelly Yachimovich (Labor ).

Yachimovich called the sale a mistake.

"The state should not give up control. We have no idea how the bank will look without a controlling interest. This is irresponsible and incomprehensible," she said.

Yachimovich said keeping control of the bank was important to protect the stability of the banking system. "The only difference between Bank Leumi and the other banks is that [Leumi] does not have the excessive executive salaries that the others do," said Yachimovich.

Hermesh, who was one of the MKs who requested a revote, said that despite promises there would be no controlling interest after privatization, behind the scenes such a group of tycoons is readying itself for the day after. He called the new situation dangerous and a tragedy for future generations.

Bank of Israel Governor Stanley Fischer and Banks Supervisor Rony Hizkiyahu also object to selling the state's share before changes are made to the law governing banks without a controlling shareholder.

Leumi, which is run by CEO Galia Maor, would be the only Israeli bank without a controlling group.

Finance Minister Yuval Steinitz has been pushing for the sale.

The market value of the shares is NIS 2.72 billion, and the state will probably sell it in two stages so as not to push the price down.

For news on Bank Leumi's results for the third quarter of 2010, see the briefs on Page 8.