Staff Argue Over Discount Sale Bonus

Workers at Israel Discount Bank are still far from reaching an agreement with the state over the forthcoming privatization of the bank, despite progress in their long-running talks.

One of the debating points is the time of distributing the NIS 250 million bonus to the staffers on the occasion of the state selling its control in the bank to the Matthew Bronfman/Rubin Schron consortium. So far, M.I.Holdings, which manages privatization issues on behalf of the state, has agreed to pay NIS 170 million to workers at Discount and its Mercantile Discount subsidiary, with the rest to be paid nearer the time when Bronfman takes over control. This last point is still being debated.

As for the staff's demand that the new owner be forbidden from selling the lucrative New York subsidiary for a period of five years, M.I.Holdings did not throw out the demand completely, but conditioned this matter on developments regarding other concerns.

Meanwhile, treasury accountant general Yaron Zelekha said yesterday that American tycoon Lew Ranieri, one of the major shareholders in Bank Hapoalim, had warned contenders that they would do better not to buy the state's stake.

Zelekha claims that Ranieri frightened off the contenders, other than Bronfman, by telling them they wouldn't earn from the deal because the state would change its terms after finalization, Zelekha says.

Ranieri was referring mainly to the Bachar capital market reforms, which recommend forcing the banks to relinquish their holdings in provident and mutual fund management companies.

Yet Ranieri's view failed to scare off Bronfman, Zelekha says. He also notes that Ranieri and the other buyers had explicitly been told when buying Bank Hapoalim seven years ago, that the bank might well have to sell off its provident and mutual fund holdings.