Regulator blocks Akirov from buying Clal Insurance through Alrov

The Israel Securities Authority (ISA) is making it hard for Alfred Akirov to acquire control of Clal Insurance Enterprises Holdings (TASE: CLIS). Acting ISA head Amit Gal has informed Akirov that he cannot acquire control of the company through Alrov Properties and Lodgings (TASE: ALRP) but only privately. If Akirov wants to proceed with acquisition of control of Clal Insurance he would therefore need to provide hundreds of millions of shekels of his own capital.

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Akirov currently holds a 15% stake in Clal Insurance and is awaiting ISA approval to increase his stake to 30%, which would give him control of the company. The approval is being delayed because Alrov has to overcome obstacles such as dealing with a ban on owning three tier companies. While today Alrov constitutes one tier, Clal Insurance would be a second tier and its subsidiary Clalbit Finance a third tier.

The ISA also made it clear to Akirov that it is dissatisfied with his interference with what is happening at Clal Insurance. This mainly refers to his opposition to the acquisition of the Max credit card company by Clal Insurance – a deal due to close in the coming days. In the ISA’s opinion, the exchange of letters between Alrov and Clal Insurance’s management is in contravention of the permit on his holdings.

Along with the restriction on purchasing Clal by the Alrov, the ISA has placed another obstacle for Akirov to surmount. On Thursday, a shareholders’ meeting is expected to be held in which directors will be elected at all public holdings. This vote will be of great importance regarding the implementation of the deal to purchase control of the Max credit card company, which Akirov opposes. He will try to propose two directors on his behalf, but even if they are elected, he will be able to appoint only one of them to the insurance company. Although the vote on the Clal deal will be by the holding company, this will have the effect of limiting his abilities within the insurance company, which is the main source of Clal’s activity.

Alrov responded, “Alrov has received the letter, and it will pass on its clarifications to the regulator and will continue to act according to instructions. We have great respect for the regulator’s actions, which ensure the financial stability of the entities supervised by him. We will comply with all the instructions, in order to move forward with the request for a permit to control Clal Insurance.”

Published by Globes, Israel business news – en.globes.co.il – on December 26, 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.