Conflict Arises Over Orion Board Composition Amid Potential Conflict of Interest Claims
Orion's shareholders are set to meet tomorrow to decide on the company's board composition. Beitah Living, holding 7% of shares, alongside the largest shareholder, investment house Mor with 18.1%, seeks to appoint four directors, including Beitah founders and executives Yoav Carmi and Ariel Frustman. Beitah specializes in real estate investments in Central and Eastern Europe, managing assets including in Warsaw. Carmi and Frustman previously held senior roles at GTC, a real estate firm formerly controlled by Israeli Kardan and later by Hungarian Optima, leaving under undisclosed circumstances. Concerns have emerged about potential conflicts of interest between their private activities at Beitah and Orion’s business, especially regarding opportunities in Poland.
Orion, established last December by G City’s Haim Katzman after a spin-off to hold three income-generating Polish assets valued at 455 million euros and related debt, is publicly traded with a market value of 87 million shekels but has lost 32% since its IPO without major events. Frustman stated that they intend to maintain strict corporate governance and avoid conflicts, emphasizing their commitment to channel all capabilities through Orion for shareholders’ benefit. He also pointed to inherent conflict risks due to Orion’s dependence on G City and criticized G City’s controlling shareholders for opposing independent directors.
The board currently has two camps: one aligned with Katzman, G City, and Norstar (holding 24% of Orion), and the other comprising Mor and Beitah. The Israel Capital Market Authority has challenged Mor’s involvement, seeking clarifications over its active role and potential breach of regulations limiting institutional holdings and control in corporations. Mor responded but did not fully clarify its alliance with Beitah, hinting at attempts to recruit other institutional investors. The regulator views this as a takeover attempt. Mor and Beitah may oppose reappointments of Orion’s chairman Eran Yaakov and other executives linked to Katzman. Analyst Investment House, holding 12.3%, is the only other institutional shareholder with a stake in Orion.
