The Knesset plenum passed a government proposal Monday to
distribute shares of Bank Leumi to the general public. The
bill was passed 24 to 6.
According to the proposal, as part of the bank's
privatization the government will hand out 20-25 percent of
Bank Leumi's capital in shares valued at NIS 3.5-NIS 4.5
million. Every Israeli citizen over the age of 18 will be
eligible to receive shares from the State. The value of each
share will be between NIS 750 and NIS 950, meaning the
average family in Israel will receive over NIS 2,000. The
shares will be transferred directly to citizens' bank
accounts without having to obtain the recipient's consent in
advance. Those who so choose can forego their eligibility by
sending a notice to the State. Citizens whose bank account
cannot be located can give notice of their bank account
within 60 days to reserve his or her share. Those who do not
have a bank account and would like to receive shares must
open a bank account.
The proposal includes a mechanism to prevent the shares from
dropping in value if or when the market is flooded with stock
that many recipients will probably want to sell immediately:
The distribution will take place in separate stages and will
be salable only after a specified period of time. Receipt of
the shares will be exempt from taxation, but sellers will be
charged according to the tax rate for the sale of securities
on any capital gains that are realized.
Finance Minister Binyamin Netanyahu says the State is
planning to execute the plan unless a serious commercial
entity offers to purchase the shares from the State.
