The dispute between Tel Aviv Stock Exchange (TASE)-listed Jewish Colonial Trust (JCT) controlling shareholder, the World Zionist Organization (WZO) and JCT's board of directors is continuing. JCT owns 5% of Bank Leumi.
JCT today notified the TASE that it recently rejected WZO's recommendation to appoint the 35-member Zionist Actions Committee to JCT's board. The aim of the recommendation is to increase WZO's power in JCT's management. According to JCT's announcement, the board rejected the recommendation on legal and material grounds.
As recently reported by ''Globes'', the dispute between the WZO and JCT's board broke out over WZO's intention to sell its controlling interest in JCT.
In recent meetings between WZO and JCT representatives, the JCT was asked to consign the founder' shares it holds in Bank Leumi to the WZO, so that they may be sold to a private entity at a profit, benefiting the WZO.
The matter has ruptured relations between the parties. To settle the relations, it was agreed that no proposal affecting JCT would be raised at the last WZO Congress two months ago, and the parties would continue their attempts at dialogue.
Due to reports reaching JCT that pertinent proposals would nevertheless be raised at the Zionist Congress, JCT sent a warning letter to WZO chairman Sallai Meridor threatening legal action if such measures were taken.
The Zionist Congress nevertheless decided to appoint the 35-member Zionist Actions Committee as additional JCT board members.
JCT's main asset, which is the core of the dispute between the parties, is its 5.01% stake in Bank Leumi. The market value of the stake is NIS 425 million. Following last year's decision to privatize Bank Leumi on the TASE, JCT's share package became a desirable commodity, and several groups, including Marlaz - Shore Area Construction Property and Holding, controlled by the Barazani and Yona families, expressed interest in acquiring it.
Published by Globes [online] - www.globes.co.il - on August 12, 2002