Conclusion - A presumption of a stakeholder transaction, which was approved in accordance with the mechanism set forth in theCompanies Law, because it is fair and promotes the best interests of the company and its shareholders. However, this presumption can be contradicted, for example, in cases where it has been proven that there was a material defect in the approval process in the company; In any event, its implementation will be examined by a court in accordance with the circumstances of the case, and inter alia, taking into account the nature of the transaction at hand and the question of whether the approval mechanism has indeed achieved its purpose and allayed the concern of harm to the company or shareholders due to a conflict of interest.
- And from the general to the specific: do back-to-back transactions and engineering deals satisfy the requirement of "the company's good"?
It should be said at the outset that the back-to-back transactions by their very nature raise questions regarding the purpose for which they were made. These are "circular" transactions - In the framework of which the loan money that Heftziba Shikun and Boaz Yona took from the banks was closed with financial deposits in Hefziba Investments' account, and served as the main collateral for the repayment of those loans. In this state of affairs, Hefzibah Investments is unable to make any use of the loan money; And this is especially "suspicious" given that the back-to-back transactions were loss-making deals for the The Borrowers (Hefzibah Shikun in the first deal and Boaz Yona in the second deal). Thus, given that the interest rate that the borrowers were required to pay to the banks for the loans was higher than the interest received in respect of the deposit in which the loan funds were deposited; In addition, the borrowers were required to pay the banks a commission for the provision of the loan. In the meantime, according to the Special Manager, the BTB Mizrahi generated a profit of over ILS 250,000 per year for Bank Mizrahi.