Shareholder revolt at ZIM: Institutional investors accuse CEO and board of conflicts of interest
Investors holding 8% demand termination of Eli Glickman amid $2.4B acquisition dispute.
Israeli institutional investors holding 8% of ZIM’s shares have accused the shipping company’s board of directors of being complicit in alleged misconduct by CEO Eli Glickman. In a follow-up letter to one sent last month, the investors called for Glickman’s termination, arguing that the board has failed to act in shareholders’ best interests and allowed conflicts of interest and a lack of transparency to persist. They also reiterated demands for the appointment of three directors to represent their interests and for the company to distribute a dividend from its cash reserves. Glickman declined to comment.
The shareholders, More Gemel, Sparta, and Reading Capital, claim that Glickman and the company’s management have a serious conflict of interest in their effort, alongside Rami Ungar, to acquire ZIM for $2.4 billion, while the company holds $3 billion in cash.
In response, ZIM’s board, chaired by Yair Seroussi, argued that replacing independent, experienced directors with candidates lacking relevant expertise could disrupt a strategic review in its late stages and harm the board’s ability to maximize shareholder value. The board retained Meitar Law Firm, led by Dan Geva, to represent it in the dispute.
The shareholders demand that the terms of Glickman and the five vice presidents involved in the acquisition proposal be terminated, or at least suspended, until the review of all acquisition offers is complete.
Glickman and Ungar submitted their proposal several months ago, but the ZIM board rejected it and engaged the investment bank Evercore to explore strategic alternatives, resulting in three competing offers, including one from German shipping company Hapag-Lloyd, which the company’s workers’ union opposes.
The shareholders contend that the board should have frozen the executives’ terms upon receiving the acquisition proposal and should not have allowed them to hold conference calls with investors regarding financial results without adequately disclosing their acquisition interest or their stake in maintaining a lower company valuation. They are calling on shareholders to vote for their candidates, Keren Bar Hava, Ron Hadassi, and Ran Gritzstein, and to oppose the company’s proposed compensation policy, which includes high bonuses for managers.
According to the shareholders, their candidates would focus on distributing the bulk of ZIM’s cash as dividends, selling assets and lease agreements to third parties, and presenting transparent financial reporting. They also criticize the company’s current asymmetric policy of writing down assets when market value falls below book value but not adjusting equity when asset values rise.
Additionally, the shareholders want ZIM to prioritize market value over market share, and to list its shares simultaneously on the Tel Aviv Stock Exchange and Nasdaq. They also seek disclosure regarding the resignation of two directors affiliated with former controlling shareholder Idan Ofer and oppose the board’s “hasty” appointment of Yoram Turbowicz, former head of the Antitrust (now Competition) Authority, and Yair Avidan, former Supervisor of Banks, which they argue exceeds normal emergency authority.
The board, in its reply, emphasized that it is conducting a comprehensive and unbiased strategic review to maximize value for all shareholders. This process includes independent financial and legal advisors, an independent transaction committee, and the integration of two new independent directors with expertise in finance and transactions. The board noted that it reviewed and unanimously rejected an initial, unilateral, non-binding proposal that it determined significantly undervalued the company, before turning to strategic and financial entities as part of the ongoing process.
