Harel Insurance Investments Ltd. (TASE: HARL) is restructuring in the aftermath of the embezzlement at Harel Investment House Ltd. Chairman of Harel Investment’s financial arm, and chairman of Harel Investment House, Moshe Abramovitz resigned today. He served in his post since 2003. He accepted the responsibility for the NIS 123 million embezzlement committed by Harel Investment House deputy CEO and CFO Guy Vaisman.
Abramovitz is one of Harel’s senior officers and considered very close to Harel Insurance Investments chairman Yair Hamburger. He will continue to serve as deputy CEO of Harel Insurance Investments, responsible for developing the company’s insurance business internationally, and developing its credit business.
Abramovitz said in letter of resignation, “In the wake of the embezzlement at Harel Investment House by Guy Vaisman… I asked Harel Insurance Investments chairman Yair Hamburger to terminate my position as chairman of Harel Investment House and chairman of its subsidiaries. The embezzlement shocked the entire system, and I find it proper to terminate my position in order to enable new forces to operate and turn this crisis into a business opportunity. The management culture at the Harel group is behind my decision to terminate my position.”
Ben Hamburger will take over as chairman of Harel Investment’s financial arm, and chairman of Harel Investment House. He has served as CEO of Harel Investment House for the past two months.
Harel Investment House manages NIS 18 billion in mutual funds and in its management portfolio.
Yair Hamburger said in response, “The crisis the company has undergone was a primary shock, but the quick, transparent, and credible handling of the crisis will serve as a springboard for restructuring that will turn the company into one of the leading companies in the capital market similar to its position in the insurance market.”
In a separate development, Harel Insurance today acquired a 60% controlling interest in Recanati Inbar Financial Management Ltd. at a company value of NIS 26 million. Recanati Inbar will become a subsidiary of Harel, be renamed Harel Recanati, and operate as a boutique investment house for customers with large investment portfolios and customized investment demands. Recanati Inbar CEO Shimon Alkabetz will become CEO of Harel Investment House.
Published by Globes [online], Israel business news - www.globes.co.il - on May 14, 2007
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