"Minister of Finance Benjamin Netanyahu is trying to take over Mifal Hapayis - Israel National Lottery and its board of directors, and determine which of its operations are good and which are not. This is basically a nationalization of Mifal Hapayis for the arbitrary bureaucratic decision by Ministry of Finance clerks and their chief," a Mifal Hapayis executive told "Globes" today. He was responding to a legal opinion by Ministry of Finance legal counsel Adv. Yemima Mazouz. She found that under the Foundations of the Budget Law (1985), the minister of finance had the authority to intervene in Mifal Hapayis management and wage policy, appoint and fire directors, etc.
The executive added, "The Ministry of Finance has declared war on Mifal Hapayis. War is war, and we will wage an uncompromising fight to prevent the Ministry of Finance's takeover of Mifal Hapayis."
Mazouz wrote Mifal Hapayis chairman and CEO Shimon Katznelson, "Chapter 4 of the Foundations of the Budget Law grants various authorities to the minister of finance regarding corporations, including approval of the corporation's budget, supervision of salaries of the corporation's employees, and giving various orders to the corporation."
Mazouz added that a corporation was also a company limited by guarantee, which the minister of finance determines that the law applies to it. "Mifal Hapayis is a company limited by guarantee. Under its bylaws, a number of government ministers appoint its board of directors, and the minister of finance is therefore authorized to make the abovementioned orders."
In the letter, Mazouz told Katznelson that Netanyahu was considering activating his authority and ruling that the Foundations of the Budget Law applied to Mifal Hapayis.
In response to Mazouz's letter, Katznelson told Mifal Hapayis's directors that Mifal Hapayis and its attorneys were considering measures to prevent the Ministry of Finance and minister of finance's intervention in its affairs, which he considered damaged Mifal Hapayis's independence.
Katznelson said, "Mifal Hapayis's managerial independence, without any external involvement, is the main reason for its success in increasing its revenue every year." He announced that he would summon a board meeting to decide on ways to fight Netanyahu's initiative.
The Mifal Hapayis executive added, "We've had many battles in the past with the Ministry of Finance and its ministers, and we always emerged stronger from them. Netanyahu is trying to create a situation in which every decision by Mifal Hapayis's board of directors is subject to prior approval by the minister of finance."
The Ministry of Finance stated in response that Mazouz's letter spoke for itself.
Published by Globes [online] - www.globes.co.il - on February 26, 2004