“Shlomo Eliyahu caused more than NIS 330 million in damage to...

The deterioration in the Migdal insurance company comes to court: Prof. Haim Levy, winner of the Israel Prize and a financing expert, filed a derivative lawsuit against Migdal Holdings and against the controlling owner, Shlomo Eliyahu.

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Levy, who is a shareholder in the company, attached an expert opinion that estimates that the financial damage caused by Eliyahu to the tower was estimated at more than NIS 330 million. Levy’s lawsuit follows a letter he sent to the company about a month ago.

Shlomo Eliyahu, the controlling owner of the tower Photo: Amit Shaal

“Since Eliyahu received the control permit for Migdal, the company has been characterized by exceptional managerial instability as a direct result of Eliyahu’s repeated interventions in its management,” Levy claims in an application filed through attorney Ziv Urbani. In Migdal Holdings alone, the chairman of the board was replaced five times and the CEO five times. In Migdal Insurance, the chairman of the board was replaced five times and the CEO three times.

The application deals in detail with the audit report on Migdal published by the chairman of the Capital Market Authority, Moshe Barkat. “The results of the report indicate a company that is run with a defective corporate governance, which is led by Eliyahu. (…) The evidentiary material reviewed by the Authority shows that Eliyahu saw being a controlling shareholder in the company a fact that gives him the right to intervene in its day-to-day conduct, even though he served only as a director of the insurance company.

“The testimony of Doron Sapir (former CEO of the group) paints a picture according to which Eliyahu sits for hours in the CEO’s office and actually serves as Migdal’s actual CEO, ‘downloads’ instructions to the subordinate managers, decides which products the company will launch and which products It will be shelved, sometimes attending audit committee meetings and stating that it does not want Migdal to formulate a new strategic plan for itself. “

Prof. Haim Levy Screenshot

Levy also refers to Moti Rosen, whom Eliyahu appoints as chairman of Migdal Insurance. Levy mentions the criticism Rosen received from the Supervisor of Insurance, Moshe Barkat, as well as Eliyahu’s attempt to oust the current chairman, Nir Gilad. “The replacement of senior executives in the various companies has damaged the stability of the company by the controlling shareholder, and this constitutes a violation of the provisions of the Supervision Law,” the request said. “The controlling shareholder of an insurance company is obliged by law first and foremost to maintain and ensure the stability of the company, and if he violates this duty, he not only violates his obligations under the Supervision Act but he also violates his duty of fairness to the company.”

In a scathing letter sent by Barkat in addition to the report, which is addressed to Migdal Holdings’ attorneys, Zvi Agmon and Shirel Gutman-Amira, Barkat refuses to meet with them, accusing Eliyahu of concealing material information from the company’s board about instructions he received from Barkat. Chairman of Nir Gilad Insurance Tower.

“It is not unreasonable to state that Nir Gilad’s claim that the directors of the company are only puppets and doers of Shlomo Eliyahu’s is correct,” noted Urbani, who wants to approve the derivative lawsuit against Migdal. Levy asks the court to order the company to pay the fee for the derivative claim and to approve the claim itself.

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