The Capital Market Authority conducts an administrative investigation in Migdal's offices

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Dr. Moshe Bareket Commissioner of the Capital Market Authority is heating up his confrontation versus a control group insurance tower and conduct large insurance groups. In recent days, examine members of the Capital Market Authority to conduct the company and its executives in front of directors, focusing on whether and how the work of the senior front Directors Group.

The main check of the authority concerns the conduct of the company's senior executives vis-à-vis director Shlomo Eliyahu , who is the controlling shareholder and who is in a frontal struggle with the regulator. This is an administrative investigation, which is still underway and in which the authority collects documents, correspondence and interviews employees and managers in the group.

The Capital Market Authority does not have criminal investigative activity similar to that of the Securities Authority. Anyway, what is happening in the tower these days is unusual, and do not remember what happened like it under Barkat. "=This is a more severe enforcement activity than an investigation, designed to examine the conduct of Shlomo Eliyahu and directors of the group and it is done in response to the desire of Migdal Public Holdings' board to remove public company CEO Nir Gilad. Barkat opposes the intention to oust Gilad and wants to remove Eliyahu from the management ranks of the group he controls (Eliyahu holds about 68.5% of Migdal's shares).

The move that became clear today is not the first, but another link in the chain of escalation in the relationship between Elijah and Barkat. Thus, as early as last July, Barkat demanded to decide between his current positions in the group: the chairman of the company, Migdal Holdings, or a director of the private subsidiary Migdal Insurance.

A source in the market estimated today that "it looks like Barkat's personal vengeance against Eliyahu. In what other company with controlling interests was such an investigation done?", While another source added that Migdal is properly managed, and Barkat is looking for information "Do what he demands. Migdal Holdings has property rights to Migdal Insurance and nothing is done wrong with the tower. On the other hand, from the PA's point of view, the move is considered a very unusual move that stems solely from the unique circumstances in the tower and due to the need to examine Eliyahu's moves and influence in the insurance group. This, after the Capital Market Authority and Barkat at its head have already intervened very unusually this year in a confrontation created in the Clal Insurance Group, between former chairman Danny Naveh and the group's CEO Yoram Naveh. In general, Barkat Insurance did not take strict administrative enforcement action as is happening in Migdal, but led an external investigation procedure, which was led by retired judge Prof. Yoram Danziger and Dr. Eyal Geva.

Barkat recently clarified that for him, the corporate governance of Migdal should be improved, including the fact that the controlling shareholder will not control the company in its daily activities and will control the board beyond the issue of appointing representatives on its behalf, or beyond his official position in the company. Thus, Barkat recently said at a conference of the Institute of Certified Public Accountants that "a controlling shareholder in an insurance company, as in banks, cannot intervene even if he is a majority shareholder, but according to his other duties.

In any case, from the point of view of Migdal Holdings' board of directors, there is a desire to remove Nir Gilad from his position due to his dealings with the board members, according to them, with the intention of appointing Moti Rosen, a veteran and very experienced insurance man who successfully served as CEO of two large insurance groups. Barkat clarified that he would not allow Gilad's status to be harmed before the end of the current year, without revealing how he would act after the beginning of 2021. In the meantime, a director of the Migdal Group both its public parent company and its insurance company close to Eliyahu has already resigned Rosen's actual appointment will be possible only after the Capital Market Authority has not objected to his appointment.

Eliyahu acquired control of the Migdal Group in late 2012 from the Italian General Group, and at a company value of NIS 5.1 billion. Since then, Migdal's value has fallen, currently standing at NIS 2.42 billion with the dividends distributed by the company not offsetting most of the gap opened in the share price.