Top Executives at Menora Mivtachim Insurance Frozen Amid Corruption Probe
The corruption scandal involving the Histadrut labor federation and insurance agent Ezra Gabay continues to unfold, implicating senior executives at Menora Mivtachim, one of Israel's largest insurance companies managing 420 billion shekels. This week, police froze 93 million shekels in Menora Mivtachim's accounts and an additional 90 million shekels in the personal accounts of five senior managers, including Group CEO Ari Kalman, Insurance CEO Michael Kalman, and Chairman Yehuda Ben Assayag.
Authorities suspect that Gabay pressured the Histadrut chairman to channel 300,000 health insurance policies for Histadrut members specifically to Menora, even if not in the best interest of the insured. This allegedly resulted in tens of millions of shekels flowing into Menora's coffers. Competitors, managing a combined 420 billion shekels (330 billion in pension funds), are preparing to capitalize on the reputational damage Menora faces, as investors have already driven Menora’s stock down 7.5% over two days, outpacing the sector’s 4% decline.
Regulators such as the Capital Market Authority and the Israel Securities Authority have taken a limited role so far, with the former lacking investigative powers and the latter requesting detailed information. Menora has disclosed suspicions against its executives including bribery mediation, fraud, breach of trust, and money laundering. Meanwhile, two derivative lawsuit requests have been filed in Tel Aviv District Court seeking document disclosure ahead of potential legal action against Menora’s senior management for alleged misuse of company funds and fiduciary breaches.
Industry insiders note that the insurance agents’ commission-based remuneration model may incentivize such misconduct, though most agents act ethically. The Ministry of Finance has attempted reforms to create a fairer commission structure but has yet to succeed. The insurance agents’ association defends its members, emphasizing their professional duty to clients. The unfolding investigation and legal actions could lead to stricter regulations and changes in industry practices.
No charges have been filed yet, and all suspects maintain their presumption of innocence. The case remains under active investigation, with potential implications for Menora’s leadership and the broader insurance sector.
