Tower Insurance and Finance Holdings (The parent company of the Migdal Insurance Company) reported last Thursday that it had been decided to appoint the CEO to the position of CEO. Yossi Ben Baruch, Who serves as CFO of the subsidiary Migdal Insurance. Ben Baruch (51), is due to take up his position on January 1, 2020 in place of Yiftach Ron-Tal Who retired from the position of CEO in early December and remained as Chairman of Insurance Tower.
Ben Baruch was brought to the tower in the past by the controlling shareholders of the company Shlomo Eliyahu, from Eliyahu’s private company through which he purchased the tower.
However, Ben Baruch’s appointment is not well received by the Capital Market Authority, which is updating the appointment procedures of CEOs of insurance companies who serve as CEOs of holding companies and vice president positions at the subsidiary. Dr. Moshe Barkat, Sent a letter to Migdal Insurance’s board of directors demanding that they not allow the appointment and inform Ben Baruch that only if he resigns as CFO of Migdal Insurance, will he be able to be appointed CEO of Migdal Holdings and Finance. The Authority believes that this is an unnatural business move, and that a situation in which Ben Baruch will serve as manager over the CEO of Migdal Insurance (Sagi Yogev) and in his other hat as VP of Finance at Migdal Insurance will serve under the CEO of Migdal Insurance.
Despite talks with Barkat on precedents (Eran Cherninsky was appointed CEO of Migdal Holdings in 2016, serving as director of the Finance and Actuarial Division, as well as Migdal Insurance at the same time), and agreement on the appointment of Migdal Insurance CEO Sagi Yogev, The commissioner opposes her.
In the letter, the commissioner states that “examining the consequences of the said appointment, against the background of the circumstances that preceded it, raises concerns that it has, apparently, a significant impairment in the effectiveness of corporate governance in Migdal Insurance; and that, among other things, the appointment And the CEO of Migdal Insurance and impair the ability of the CEO of Migdal Insurance to properly monitor the functioning of the director of the finance division at Migdal Insurance. “
The Commissioner further noted that his letter does not necessarily exhaust the reference of the Capital Market, Insurance and Savings Authority to the said appointment and it may take additional enforcement measures in this matter under any law.
Migdal reported today that Migdal Insurance’s board of directors intends to hold a discussion on the matter in the coming days.
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