Star-gazing billionaires

Arison's self-professed clairvoyance is nobody's concern, so long as Bank Hapoalim is run rationally.

By
June 24, 2009 20:39
3 minute read.
The Jerusalem Post

Shari Arison 248.88. (photo credit: Bloomberg)

Multi-billionaire Shari Arison, who besides other assets holds a controlling interest in Bank Hapoalim, isn't the richest woman in the world but she is the closest to it in Israel. As such, she is the favorite local target for gossip purveyors and scandal-mongers. Arison may not actively court notoriety, but she doesn't credibly avoid it either. The latest installment in her tempestuous public saga accompanied the much-ballyhooed launch of her autobiography Birth: When Spirit and Substance Meet. Arison claims powers of extrasensory perception: "I foresaw the financial crisis. I get messages in my sleep, in pictures and words," she told the press, adding that she had considered selling her stake in the housing and construction firm Shikun U'Binui, but was dissuaded by "a message from above." This, and more in the same vein, triggered a media maelstrom, casting doubt on the ability of someone who "hears voices" to run a financial giant like Bank Hapoalim. THE GOOD news, though, is that she doesn't. Israeli law specifically prohibits the shareholder from interfering with the bank's directors and executive decisions. When Arison recently tried to buck this regulation, she lost. Bank of Israel Governor Stanley Fischer and Supervisor of Banks Roni Hizkiyahu forced the replacement of her handpicked bank chairman Danny Dankner. More than any other large Israeli bank, Bank Hapoalim burned its fingers in America's subprime mortgage debacle. Bank Hapoalim, furthermore, planned to acquire questionable Russian and Ukrainian banks. Its central computer system crashed not long ago, a breakdown which came close to causing outright panic (Arison now says she telepathically foretold the massive failure). When it appeared to the regulators that Bank Hapoalim might be administered by personal caprice, they intervened vigorously and didn't relent until they prevailed. That wasn't all. Just last Tuesday, they prevented Arison from buying out her brother Micky's 23 percent share of Arison Holdings (of which she owns 77%. Arison Holdings controls 20% of Bank Hapoalim). Hizkiyahu nixed the transaction because of the recent upheavals at the bank. The bottom line is that the public's interests aren't subject to the eccentricities and whims of one individual. However, precisely because Arison isn't allowed free reign, this tycoon oughtn't to be treated like some preposterous cartoon character - even if she doesn't always behave with sufficient circumspection considering her celebrity, three failed marriages and attendant scandals. Arison has generated media commotions aplenty, not only here but also in the US, especially in a 2004 Miami custody case. Previously, in 2003, in a huff about the Israeli media, she announced that she was leaving the country for good and canceling all philanthropic projects here (she had funneled a whopping $25 million annually into local community causes, chiefly hospitals). Nevertheless, she soon returned. She had been living here on and off since 1992, but became a major player after the 1999 death of her father Ted Arison, whose empire she largely inherited, drawing instant fire from populist wagging-tongues. IN SOME respects, Israelis haven't risen above their forebears' shtetl mentality, according to which each person reckoned that his neighbor's affairs were everyone's business, and that his neighbor's possessions must have somehow been attained at everyone's expense. Waging petty class warfare has no place in a modern state, hungry for investment and development. It's counterproductive. But the Histadrut relished doing just that when it launched an inexplicable personal smear campaign in 2002, after 900 Bank Hapoalim employees were laid off. Billboards throughout the country proclaimed: "Shari Arison laughs while 900 families weep." That was followed up with aggressive recriminations from some of the more pugnacious and demagogic local journalists. Thereafter, Arison was regarded as fair game. This is both wrong and unhelpful. Our society can perfectly tolerate idiosyncratic characters. Arison's self-professed clairvoyance is nobody's concern, as long as she doesn't harm others, isn't manipulated by charlatans, and so long as Bank Hapoalim is run rationally. Thankfully, the Bank of Israel is resolutely making sure that Hapoalim under Arison's sway is managed with all the responsibility and transparency owed its depositors and shareholders.


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