Company Alrov Real Estate , Controlled by businessman Alfred Akirov, last Thursday submitted an application to the Capital Market, Insurance and Savings Authority for a control permit in the company Clal Insurance , In which it currently holds 15% of the shares.
Akirov (80), who wants to increase his holding in general to up to 30% of the shares, is known as a dominant controlling shareholder – and the big question is how much he would like to be involved in directing Clal Insurance’s activities if and when he receives the controlling shareholding. This is after he invests a significant amount of about NIS 800 million in it (on his current investment he earns about NIS 300 million “on paper”).
At least one of the market’s concerns Akirov has been reassuring since the beginning of the week: As to whether he plans to add his son, Georgi, to Clal Insurance’s board, Akirov said his family does not intend to take Clal management on its back. “I have good candidates for the board of directors at Clal, including professionals who have held senior positions in banks and insurance companies. We will not take that on ourselves,” he said. This statement contradicts what he said last month, according to which Georgi Akirov (53), who has no experience in the field of insurance, is expected to join the board of directors of the insurance company that manages members’ funds for more than a quarter of a billion shekels.
And yet, the possibility that Akirov will control Clal Insurance is very troubling to regulators, saving Clal Insurance and the company’s senior executives. The latter matched last year against Akirov after opposing a stakeholder deal that Alrov sought to approve, and which was intended to benefit his son Georgi (at the foreign hotel company Luca). In response, senior members of Clal Insurance experienced a “retaliatory action” on the part of Akirov, who took part in an attempt to oust CEO Yoram Naveh and “build a portfolio” against the company’s chief investment officer, Yossi Dori.
Does Akirov deserve to control society? In terms of the dry law, there seems to be no impediment to this – Alrov, despite being a real estate company rich in properties in Israel and abroad, is not considered a “significant real corporation” in the criteria set by the Centralization Law, in a way that prevents it from acquiring control of Clal Insurance. Significant financial (under the same law).
On the other hand, the fears that he might harm the company’s corporate governance, he will try to “stir” the appointment and dismissal of senior executives out of an apparent desire for revenge (as he has already tried to do) or to promote his other businesses through Alrov, through the large public funds Definitely disturbing various factors.
These have something to rely on: Without knowing Akirov’s intentions regarding Clal, from previous deals by prominent figures in the business sector in Israel who acquired control of an insurance company, one can learn about a varying degree of intervention in its business, in a way that most did not benefit it.
Dankner’s model: Intervene for the benefit of friends
Clal Insurance is today run as a company without a controlling interest, the only one of the largest insurance companies in Israel. Until the middle of the previous decade, the company was controlled by Nochi Dankner’s IDB Group, which did not hesitate to direct the use of members’ funds for the purpose of assisting other businesses in which it had an interest.
Dankner Nochi / Photo: Einat LeBron
There are mainly three cases in which Dankner “subordinated” Clal and its assets to his benefit or to the benefit of his associates. The first and most blatant was the acquisition of 50% of the investment banking company of his close friend and financial advisor Dan Tahori. Clal Finance, a subsidiary of Clal Insurance, acquired its shares in Tahori in June 2006 for NIS 20.4 million. In the following years it became clear that the acquired company, whose name became Clal Tahori, did not live up to expectations and in April 2013 the failed adventure came to an end, during which seven years its value fell by 90% – to only NIS 5 million, not before Dan Tahori himself became rich at Clal Insurance at NIS 30 million.
Another case of alleged confusion between Dankner’s interests and Clal Insurance’s funds occurred in 2010. Against the background of the huge investments made by IDB Group in Credit Suisse shares, the group provided a loan to the fund established by the Swiss bank in the amount of $ 250 million, coming from two companies – Koor and Clal Insurance , in equal parts. As far as is known, a large part of the capital invested in the fund has been written off.
A third case concerns Danny Naveh, who was chairman of Clal Insurance until about a year ago. Many eyebrows were raised in 2013, when Naveh was appointed to the position. What played to his advantage were his friendly ties with Dankner, and probably the reason that led Clal to become an anchor investor in Naveh’s fund, Agate. Of the $ 64 million raised by the fund, 30 million came from total, a significant portion of which is from members’ funds in pension funds and yield-guarantee policies.
The answer model: with almost no intervention
In late 2006, Yitzhak Tshuva’s Delek Group acquired control of the Phoenix Group from Yaakov Shachar and Israel Kaz. Teshuva held control of Phoenix for about 13 years, until it transferred, after several unsuccessful attempts, to the foreign investment funds Centerbridge and Geltin at the end of 2019.
Answer Yitzhak / Photo: Tamar Mitzpi
During Delek Group’s tenure as the controlling shareholder in the insurance group, no stakeholder transaction or similar transaction has ever been made with the Phoenix nostro funds, nor with the members’ funds. However, towards the end of its term, in March 2018, Phoenix invested an estimated amount of more than $ 10 million in an investment fund in television content established by Keshet, in which Teshuva held about 22% at the time.
It should be noted that over the years the Phoenix lent money to Delek Real Estate, but these loans were made prior to the acquisition of control of the insurance group by Tshuva, and even when Delek Real Estate requested a deferral of loan repayments, the deferral was made without change in terms of cash flow. Real Estate Company.
Elijah’s model: incessant intervention
For Shlomo Eliyahu, the intervention model is completely different. Over the years, since he acquired control of the tower in 2012, no actions have been taken on his part to help his other businesses and he is careful not to interfere in what is happening with the members’ money. However, Eliyahu is constantly interfering in what is happening at the insurance company and in recent years has provided an endless series of struggles with Migdal’s board of directors and management.
Shlomo Eliyahu / Photo: Kfir Ziv
Since becoming the controlling shareholder, his intervention in the management of the company has led to unrest at the top of Migdal, and in those eight years it was replaced by six chairmen and three CEOs. Elijah also appointed directors on his behalf, as he did only last month when he replaced four directors. The capital market commissioner is closely following his move, and even informed him just a few days ago that he was suspending the appointments of two of those new directors.
Elijah also did not take any action for the personal benefit of the controlling owner of the tower. Although Eliyahu tries to interfere a lot with what is happening at the insurance company, and the newspaper headlines are full of struggles between him and Migdal’s board and management, he is careful not to interfere with what is happening with the members’ money.
In any case, the ball is first in the hands of Dr. Moshe Barkat.