Israeli Capital Market Authority Challenges Institutional Investor Mor's Active Role in Orion Management
The Israeli Capital Market Authority (CMA) has intervened for the first time to limit the involvement of institutional investors in the management of public companies. The regulator has requested clarifications from investment house Mor regarding its alliance with the family office "Habaita Living" in the company Orion, which was spun off from G City owned by Haim Katzman. Mor and Habaita Living formed a coalition holding 25.1% of Orion's shares, aiming to appoint four directors to lead the company. The shareholder meeting to approve these appointments is scheduled for August 24, 2025.
Mor holds 18.1% of Orion, and together with Habaita Living's 7%, they surpass the 24.4% held by Norstar and Katzman. Katzman himself controls 18% through Norstar. The CMA's intervention highlights concerns about the boundary between passive and active management by institutional investors, emphasizing that while they can act as active shareholders, they are legally restricted from significant holdings and direct management involvement. The regulator warned Mor that its involvement might exceed the limits set for institutional investors, who are prohibited from managing companies and can hold no more than 20% in a real corporation.
Orion, listed on the Tel Aviv Stock Exchange at the end of 2025, is a company without a controlling shareholder, created to hold three income-generating assets in Poland valued at 455 million euros. G City seeks to reduce its leverage through this spin-off. The CMA is investigating whether Mor considered changing Orion's board composition when increasing its stake and demands detailed disclosures about negotiations with Habaita Living and the selection process for the proposed directors.
Separately, the CMA is examining Mor's involvement in Holmes Place, a fitness club chain where Mor holds 24.25%. In January, Mor sold 7.5% of its stake and extended a 45 million shekel loan to CEO Keren Shtoi to finance the purchase. The regulator seeks to understand the benefits to Mor's clients from this transaction and requests full details of the loan and related discussions. Mor's representatives argue that the move was intended to retain the CEO for shareholders' benefit and that the sale price exceeded the current market value.
Mor responded by affirming its commitment to institutional activism within regulatory frameworks, focusing on shareholder interests while respecting the independence of invested companies.
