Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) controlling shareholder Shlomo Eliahu is again removing a chairperson whom he brought to the group less than a year previously. Migdal announced today that Prof. Oded Sarig, who was formerly Supervisor of Insurance and Capital Markets at the Ministry of Finance, in which capacity he approved the deal of Eliahu's life in Migdal, is leaving the group after just seven months.
This is in fact another very short period at the job for someone that Eliahu personally brought into Israel's largest insurance group, after a bust-up with the previous chair of Migdal Holdings, Anat Levin, which led to her leaving after a few months.
The company said in its announcement that Sarig was stepping down because of restrictions he had placed on himself in relation to the insurance subsidiary, to which he had though he could contribute greatly despite these restrictions, whereas in fact he found that they prevented him from fully exploiting his capabilities.
The latest turn of events is surprising for anyone who recalls the strong connection between Eliahu and Sarig a few months ago. Sarig took up the post in late January this year in spite of fierce objections by his successor as Supervisor of Capital Markets, Insurance and Savings, Dorit Salinger, and after months of conflict and ignoring of outspoken public criticism. Eliahu stood by Sarig, while the latter insisted that there was no impropriety in him joining Migdal shortly after he had approved the sale of control in the group to Eliahu.
Last September, after completing the year-long obligatory cooling-off period, it was reported that Sarig was about to join the Migdal group. At first the talk was of a senior position in one of the insurance companies owned by Eliahu (Eliahu Insurance or Migdal Insurance), an office that would require approval by the Supervisor of Capital Markets, Insurance and Savings.
Salinger, who, as mentioned, succeeded Sarig in that role, raised strong objections to the latter's appointment to a senior position in the Eliahu-Migdal group, and even ruled out his appointment as CEO of Eliahu Insurance (which controls Migdal), which she had the authority to do.
Salinger's very public opposition stemmed from a problem of appearances that she argued arose from the appointment of Sarig to a senior position in a group when he himself had approved the transfer of control in it to Shlomo Eliahu, who was seeking to appoint him. Not only that, but claims were made that directives by Sarig had made the acquisition of control in Migdal from Assicurazioni Generali considerably cheaper, saving Eliahu a huge amount of money.
Salinger stipulated that Sarig could serve as an office holder in a financial institution connected to Migdal only after three years from the date he left the Ministry of Finance. She even fined Eliahu Insurance NIS 1.7 million for failing to observe directives concerning the appointment of a CEO.
At any rate, despite the objections, Sarig was employed by the privately-held Eliahu Insurance from September 2014 as a consultant to the founder and chairman. On January 27 this year, he was appointed chairman of Migdal Insurance and Financial Holdings (controlled by Eliahu Insurance). This is the listed parent company of Migdal Insurance and Migdal Capital Markets, and the Supervisor of Capital Markets, Insurance and Savings has no regulatory authority over it.
Published by Globes [online], Israel business news - www.globes-online.com - on September 10, 2015
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