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16 Iyar 5765 - May 25, 2005 | Mordecai Plaut, director Published Weekly
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NEWS
Bank Leumi Share Grants Approved

By Eliezer Rauchberger

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.

 

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