The commissioner of the capital market, Dr. Moshe Barkat, informed the real estate company Alrov That will not allow her to acquire control ofClal Insurance Until the company finds a solution to meet the limitations of the Centralization Law.
At the end of a meeting with representatives of Alrov, which is controlled by the businessman Alfred AkirovOn Sunday this week, the company was informed that the outline it was trying to promote, according to which it could purchase Clal shares that would allow it to increase its holdings beyond 15% of the insurance company’s shares (which the company already holds) and gain control, is not possible until a control permit is granted. Alrov intends to request temporary approval to purchase additional shares and deposit them with a trustee until a control permit is issued, first published in Globes.
The bulk of the dispute between the parties concerns the hurdle it has raised ISAAccording to which if Alrov acquires control in general in the current membership structure, a pyramid of three tier companies (public companies or companies issuing bonds) will be created, a situation contrary to the law of centralization that allows only two tier companies.
Alfred Akirov / Photo: Yossi Cohen
In Alrov’s report to the stock exchange, the real estate company explained that as part of its contacts with the commissioner, it proposed in writing a number of possible outlines for obtaining a control permit in general and attached an international expert opinion. The company sought to acquire control under the permit, which includes conditions that would require the company to take these steps within a specified period.
However, after a meeting with the Commissioner and his staff, as stated last Sunday afternoon, a legal comment was received from the Capital Market Authority stating that it does not accept the interpretation that Kalbit is not a stratum company, and regarding the purchase of shares before the permit was issued. To be complied with before the permit is granted and later conditions. In the opinion of the Capital Market Authority, organizational measures that will lead to compliance with the Centralization Law are of the type that must exist before the permit is issued, and hence Alrov’s proposal is not possible.
The authority fears that the acquisition will turn Alrov into a significant real corporation
Another issue examined in the opinion concerns the provisions of the Centralization Law that deal with the separation between a significant non-profit corporation and a significant financial corporation. The opinion stated that in light of the company’s determining sales turnover and the volume of credit from corporations in Israel and bonds issued to the public in Israel (approximately NIS 265 million, and approximately NIS 5.3 billion, respectively), Alrov is not a significant non-profit corporation and therefore acquires control. It should be noted that Clal is defined as a significant financial corporation, and therefore Alrov cannot hold a significant financial corporation.
In its response, the Capital Market Authority stated that it was clear that the company was not a significant non-financial corporation, but sought to complete the company’s response to the question of whether, given the acquisition of control, in view of Clalbit’s classification as a non-financial corporation
Balrov noted that the company is examining the letter from the Attorney General of the Capital Market Authority and other possible outlines and is working to complete the reference to the provisions of the Centralization Law regarding the separation between a non-profit corporation and a financial corporation. That the letter does not constitute a negative answer on the issue of the permit since the Capital Market Authority has not yet completed its work and discussions on the issue and that this is a reference to specific issues only. Accordingly, a follow-up meeting was scheduled with the staff of the Capital Market Authority in order to discuss both the position as presented in the letter from the Capital Market Authority, and other alternatives that the company seeks to examine, “Balrov noted.
Malfred Akirov responded: “Alrov intends to continue to operate and obtain a control permit for the purchase of Clal Insurance. As long as Alrov does not receive a control permit at the end of the road, I will be able to act to obtain a permit to acquire control personally.”