Hebrew). The framework, which was
approved by the Governor of the Bank of Israel and in consultation with the
Licenses Committee, is described in the holding permit and the accompanying
letter published today by the Bank of Israel.
Ms. Shari Arison’s control permit will be cancelled, and replaced by the said holding permit, on the earlier of: a decline in the holdings percentage to under 20 percent of the bank’s equity, or December 31, 2018.
In view of the size of the holdings relative the domestic equity market, a period of up to five years (with an option for an extension of another two years) was set, during which the controlling shareholder will have to sell her shares until reaching a holding not exceeding 5 percent of the bank’s total equity. To prevent any concern of conflict of interest, the terms of the bank’s directors, who are connected with the Arison group, will end immediately. The Chairman of the Board will continue to serve in his role after the said change in ownership, pursuant to the decision of the Supervisor of Banks, as other than having been appointed by the Arison family, he is not an officeholder in the group owned by her, nor connected to her in any other way. In addition, the framework established that from the date of the holding permit going into force, Ms. Arison’s voting rights at the General Meeting will not exceed 5 percent.
After the holding permit goes into effect, Bank Hapoalim will become a bank without a controlling core, whose shares are fully held by the public, directly or through the institutional investors managing the public’s investments and long term savings, similar to Bank Leumi, Discount Bank, and recently Dexia Bank as well. As such, the election of directors will be carried out at the General Meeting, in accordance with the mechanism generally used at banks without a controlling core, in which the Committee to Appoint Directors (headed by retired judge Moshe Gal) recommends nominees to serve as directors to the general meeting of shareholders. It should be noted the Bank of Israel does not necessarily see an advantage to a specific ownership model—controlling core or dispersed holding—and aligns the supervisory point of emphasis with the ownership model formulated at each bank.