After months of rancor between Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) controlling shareholder and chairman Shlomo Eliahu and Nir Gilad, CEO of the company and chairman of subsidiary Migdal Insurance Co. Ltd., Eliahu has begun the process of ousting Gilad from both roles. The board of Migdal Insurance and Financial Holdings unanimously decided on the move today. The company's announcement stated that former Menorah Mivtachim Holdings Ltd. (TASE: MORA) CEO Moti Rosen had been appointed a director of Migdal Insurance Co. with a view to appointing him chairman of the board, subject to approval by the Capital Market, Insurance and Savings Authority.
The Capital Market, Insurance and Savings Authority, headed by Moshe Bareket, opposes the removal of Gilad. The Authority made clear in the past that it did not wish to see the controlling shareholder involved in the company and "removing on a whim the chairman he had chosen and appointed."
The Authority now seeks to clarify what happened at today's board meeting and is apparently unhappy at the latest turn of events. A source familiar with the matter said that the Authority would consider "taking severe steps against the company and the directors who abetted the move."
Tension between Eliahu and Gilad was reported back in February. It was reported at the time that, as in similar instances in the past of tensions between Eliahu and senior managers of companies under his control over Eliahu's desire to interfere in management decisions, the dispute led to meetings with Bareket, who also held meetings with external directors on the Migdal board. It is not inconceivable that Bareket will now summon all the directors to meet him.
As far as the Capital Market, Insurance and Savings Authority is concerned, Eliahu has to justify the group board's decision. Sources close to those involved said that Eliahu was prepared to go to court over the matter.
Gilad joined Migdal in February 2019, replacing Oded Sarig. Eliahu has had speedy fallings out with several of his predecessors. The latest confrontation between Eliahu and Midgal's senior management was over the removal of the group's veteran investment manager Assaf Shoham, who was close to Eliahu and had his confidence. The status of several other managers at Migdal Insurance identified with the family of the controlling shareholder has also weakened recently.
Published by Globes, Israel business news - en.globes.co.il - on April 23, 2020
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