As expected, the Bank of Israel last night gave its approval to Arison Holdings Ltd., controlled by Shari Arison, to acquire the controlling stake in Israel Salt Industries Ltd. (TASE:SALT). The Dankner family has, until now, held 6% of Bank Hapoalim (LSE: BKHD; TASE: POLI). The approval from the Bank of Israel means that the Dankner family will no longer be a party at interest in the bank, with Arison becoming the sole owner of the 20% controlling stake.
The approval for Arison's takeover of Salt Industries has paved the way for Supervisor of Banks Rony Hizkiyahu to allow the appointment of Poalim Capital Markets - Investment Bank Ltd. chairman Dan Dankner as Bank Hapoalim chairman in place of Shlomo Nehama. As a shareholder in Salt Industries, part of the controlling interest in the bank, Dankner has up to now been legally barred from becoming chairman. He is now set to take over as chairman on Wednesday May 15.
The Bank of Israel made the issue of a control permit to Arison conditional on the curtailing of her powers at Bank Hapoalim. It was decided, for example, that the number of external directors would be increased to seven, of which two only can be replaced each year. Banking sources believe that the Bank of Israel is troubled by Arison's caprices and by the prospect that she could be the sole controlling shareholder in Israel's largest high-street bank, with no one to serve as a counter weight.
Once he takes up his post, Dankner can, if he so wishes, propose the appointment of Irit Izakson as his deputy to the bank's board, an appointment which the Bank of Israel blocked this week for procedural reasons. Izakson, who currently sits on the Bank Hapoalim board, has the requisite background and experience and she is a suitable candidate for the post. She is therefore likely to meet the Bank of Israel's competency requirements without difficulty, and is considered a close associate of Arison and her representatives on the bank's board.
However, Bank of Israel officials have been asking why Bank Hapoalim is the only bank that insists on appointing a deputy chairman and what the appointment means, for example how duties will be shared between the chairman and deputy. Dankner himself served as Nehama's deputy for a long time.
Published by Globes [online], Israel business news - www.globes.co.il - on May 10, 2007
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