Elron Board Ousts Chairwoman Bachar Menuch Amid Control Battle

The internal power struggle at the investment group Elron reached a boiling point Wednesday evening as the company's board voted to remove Chairwoman Lisia Bachar Menuch. Dan Hoaz has been appointed as interim chairman. Bachar Menuch responded by threatening legal action, alleging improper motives behind her dismissal. The board meeting where the decision was made was convened at the request of two directors representing the controlling shareholder, Arieli I.E.L., Evan Jonathan Renoff and Ariel Bentov. During the meeting, Bachar Menuch, who is also a shareholder in Arieli, raised strong objections, both written and verbal, questioning the timing of the decision and accusing the directors of acting out of conflict of interest. Renoff and Bentov, also controlling shareholders in Arieli, countered that their actions were purely business-driven and solely for the company's benefit. In addition to the chairwoman's ouster, Yaniv Rog was appointed as a director, and Ido Heller as an independent director. Bachar Menuch will continue to serve as a regular board member. This upheaval at Elron stems from a severe dispute among the partners in Arieli and significant financial pressure on the controlling group. Arieli took out a loan of approximately NIS 90 million from The Phoenix Investments in September 2024 to acquire control of Elron, pledging the shares as collateral. A sharp decline in Elron's stock value, which has lost tens of percent and is currently valued at NIS 152 million, led to a breach of financial covenants and a demand from The Phoenix for capital injection or seizure of controlling shares. Two and a half weeks ago, Elron reported an exchange of letters between Bachar Menuch's legal representatives and Renoff and Bentov, revealing the underlying tension. At that time, Arieli reported transferring a substantial sum to The Phoenix, extending the debt repayment deadline to the end of October. However, the temporary truce has ended, and the conflict among the controlling shareholders has now moved to the boardroom, with potential legal ramifications.