Jewish Colonial Trust has joined those asking for clarifications of the settlement with former bank officers in the US tax evasion affair.
Additional shareholders in Bank Leumi (TASE: LUMI) have asked the bank for further details of the compromise settlement being formulated in the derivative action. The Jewish Colonial Trust Ltd. (TASE:OHH), which holds 5% of the shares in the bank, has approached the bank’s chairman, David Brodet, with a demand for shareholders’ meeting to be convened for a vote on the compromise agreement in the derivative action against former senior managers. The Jewish Colonial Trust has asked that past and present officers of the bank should be summoned to the meeting to clarify the matter.
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Two weeks ago, Bank Leumi signed a settlement with the US authorities in which it admitted helping American customers to evade taxes, for which it will pay a $400 million fine. In the wake of the affair, derivative actions have been filed against former senior office holders of the bank, chiefly against former chairman Eitan Raff and former CEO Galia Maor.
It has recently been reported that there are talks on a compromise over the first lawsuit that was filed, whereby insurance company Lloyds will pay about NIS 60 million, while the former senior managers of the bank will not pay out of their own pockets. Several shareholders have sought clarifications about the emerging compromise, among them the Accountant General at the Ministry of Finance Michal Abadi-Boiangiu, who holds 5% of Bank Leumi on behalf of the state, and investment institutions who made their approach through the Association of Investment Houses in Israel. Now The Jewish Colonial Trust has come along with a similar demand.
The Jewish Colonial Trust has asked Bank Leumi for further details, among them information about the approvals and checks made at the bank before it confirmed the settlement with the US authorities, which shareholders knew the details of the settlement and were given the opportunity to respond before it was approved, whether under the settlement there is any assumption of responsibility or participation in the payment by bank officers or whether the entire financial burden of the settlement falls on the bank’s shareholders, and detailed information about the insurance policies of existing officers of the bank, and details of any letters of indemnity that the bank may have given to its officers.
The activism that The Jewish Colonial Trust is exhibiting comes at the same time as shareholders in The Jewish Colonial Trust itself are demanding that is should distribute its Bank Leumi shares as a dividend in kind. For example, the Company for the Location and Restitution of Holocaust Victims’ Assets, which owns nearly 25% of The Jewish Colonial Trust, made such a demand last week because of the discount at which The Jewish Colonial Trust is traded in relation to the value of its holding in Bank Leumi.
Published by Globes [online], Israel business news – www.globes-online.com