Derivative Lawsuit Filed Against Harel Insurance Over Naming Tower After Founders Without Compensation

A shareholder of Harel Insurance and Investments, All-yer, filed a derivative lawsuit on Monday at the Tel Aviv District Court against the company's directors and officers. The suit alleges that Harel's controlling shareholders, Yair Hamburger and his siblings Gideon and Nurit, who collectively hold 42% of the company, commemorated their deceased parents by naming an 18-story office tower owned by Harel after them without providing any compensation to the company. The tower, known as the M.A.H. Tower on HaHilazon Street in Ramat Gan, is named "Margot and Ernest Hamburger House" after the parents of Yair and Gideon Hamburger, founders of Harel before its 1982 public listing.

The lawsuit claims that this naming constitutes an allocation of a valuable company asset to the controlling shareholders without consideration and without the required legal approvals for related-party transactions. It accuses the directors and officers of negligence in supervising company activities and breaching their fiduciary duties by allowing the company to grant a significant real estate asset's naming rights, which hold high value, free of charge to the controlling shareholders. The complaint seeks the return of funds allegedly lost to the company due to this transaction.

This legal action follows a precedent where a similar derivative suit was filed against Delek Group after a report revealed public company funds were used to build a synagogue named after the controlling shareholder's parents. That case was settled in July 2024 with the controlling shareholder, Yitzhak Tshuva, agreeing to return 8 million shekels to the company, alongside an additional 8 million shekels from supporting directors.

Harel's legal representative, attorney Dori Kalgasbald, stated that the company will respond in court. The case highlights ongoing scrutiny over corporate governance and related-party transactions in Israeli public companies.