Minister of Communications Shlomo Krei is determined to oust the chairman of the board of directors of the Israel Post, Mishael Vaknin, for what he defines as "the failed activity of the Postal Company, which harms the customer public and the company's reputation." According to Karai, the company is "at an unprecedented low in terms of the level of service to the public – since the beginning of 2022."
Today, the Minister of Communications issued a letter addressed to Shlomi Heisler, Director General at the Ministry of Finance, Yogev Gradus, Commissioner of Budgets, and Yali Rotenberg, Accountant General at the Ministry of Finance. In a letter that comes in response to their warning earlier this week that the removal of the chairman of the post office would undermine the company and jeopardize the planned privatization of the postal company, Qari criticized senior finance officials, including its head, Minister Bezalel Smotrich, for "not bothering to pick up the phone to the minister. The company's supervisor, supervisor and regulator, before they decided to send him a second letter within 3 months, all just to protect the failed activity of the postal company, which harms the customer public and the company's reputation."
In the letter, Karai notes that "after examining for several months, I have decided, as someone who is in charge and responsible for the company both under the Postal Law and the Government Companies Law, to initiate a hearing process for the chairman of the company's board of directors, prior to his removal." "Had you not stuck sticks in the wheels of the hearing process for several months, we could have already been in the process of privatization, to the satisfaction of all parties," he said.
About 3 months ago, Post Director General David Laron threatened that if Chairman Vaknin was removed from his position, he would announce his resignation from the position. To this, Qari responded harshly to the finance officials: "I find it puzzling that you accept with justification, equanimity and even compliments, the threats of the company's CEO lest he go home and resign if the chairman of the board of directors is ousted. This is a CEO who is embezzled in his position, who is ostensibly in personal loyalty to the chairman of the company's board of directors, loyalty that overrides the mission he took upon himself and his duty of loyalty to the company, and as such, he is not at all worthy of his position from the outset."
According to Karai, Israel Post's reckless and failed conduct is reflected in the variety of areas of competition in which it operates. Although it has "a great deal of information, being the only nonbank entity in the country that manages current accounts for about 600,000 customers, managing an account at the Bank of Israel; and companies in Paper Clearing House, Masav and Zahav. Despite the company's holding in these assets, it is still stagnating, provides poor service to the public and is not ready for privatization," writes Karai. The minister also criticized the way the postal company's reports were presented, arguing that "your presentation of financial statements positively is explicitly tainted by coverage of reality and even bias."
Regarding the Post's financial results, Karai writes, "The apparent improvement in the company's revenues resulted from an increase in the Bank of Israel interest rate, which led to additional revenues totaling NIS 42 million in 2022 compared to 2021 and an increase of NIS 35 million in the first quarter of 2023 compared to the corresponding quarter of 2022. Tens of millions of shekels, not a single shekel of which reaches customers. In addition, the increase in the company's revenues in 2023 was due to regulatory changes prior to privatization, mainly the removal of price controls from postal services and postal bank services.
"The Company, headed by the Chairman of the Board of Directors, has chosen to significantly increase the rates of the Postal Bank's services provided to private customers, particularly to populations in the lower deciles compared to business customers with whom the Government of Israel is a member through the Accountant General, which is the Postal Bank's largest customer, whose rates have been revised at a lower rate than private customers. If this is not enough, I will further enlighten you that the decrease in the company's expenses is mostly due to a decrease in wage expenses as a result of the implementation of the state-funded recovery plan.
"In this regard, I will draw your attention to the report of the Board of Directors of the Company for the period ended March 31, 2023. The Ministry of Finance under your leadership chose to invest a lot of money in the company, a significant part of which was not invested in income-producing investments such as financing employee retirement or in machinery and technology, but in financing ongoing operations. These investments will go down the drain if the company continues to operate in the same way. That won't happen on my watch."
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