Israel Railways petitioned the Supreme Court: demanding ministers Regev and Amsalem appoint missing directors

Israel Railways has turned to the Supreme Court with a demand to complete without delay the appointment of missing directors to the company's board, after it was left without external directors and without a director with accounting and financial expertise. As part of the petition, the railway asks the Supreme Court to order the Minister of Transport, Miri Regev, and the Minister of Regional Cooperation, David Amsalem, to exercise their authority under the Government Companies Law and complete the required appointments.

The petition was filed on behalf of Israel Railways by attorneys Yuri Nehushtan, Esther Koren, David Olstein, and Neta Avrahami from the law firm Goldfarb Gross Seligman, and it refers to the shortage of directors that arose about a month and a half ago, when on June 5 the term of an external director who also served as a director with accounting and financial expertise ended.

On July 15, two more directors left, retired judge Sarah Frisch and Shulamit Geller, after they opposed the appointment of Yaakov Marciano, the VP of Passengers who had served in the position for only about seven months, as acting CEO of the railway. The two claimed that it was an inappropriate decision, and Frisch wrote in her resignation that she was not prepared to accept responsibility for the decision. Marciano's appointment was indeed approved by the board by a majority of 4 to 2, but was later rejected by the committee for checking appointments in government companies, the Dotan Committee, which agreed with the claim that Marciano does not have the experience required for the position.

Following these departures, the railway's board of directors was left without external directors and without a director with accounting and financial expertise, as required by law, and now, as stated, the railway is demanding that the responsible ministers act on the matter. The resignations of the Israel Railways directors illustrated the management vacuum in which the railway has been in recent times. Since the departure of CEO Shiku Zana in August 2025, a permanent CEO has not been appointed, and at the same time other senior officials in the company have also been replaced.

In July, the chairman of the board, Moshe Shimony, left his position after being appointed chairman of the Mekorot company, and Avner Flor's appointment to the board was approved in his place, and he was later elected to the position of chairman. Since Flor was the one who served as acting CEO of Israel Railways, in order to allow him to be appointed chairman, the railway had to find a new acting CEO, and when Marciano's appointment was rejected, it was decided to appoint Avi Elimelech, who had served as acting CEO for several months before Flor.

In a letter to the Supreme Court, the railway claims that the lack of directors prevents it from establishing the statutory board committees in a legal composition, including the committee for reviewing financial reports. The company requested to schedule an urgent hearing, among other things due to the regulatory deadlines applicable to it and the need to complete the appointments as soon as possible. The significance of the shortage of directors with financial understanding is not only corporate. Israel Railways is simultaneously dealing with complex infrastructure projects, including the electrification project, delays in projects, and operational malfunctions, and this is happening alongside the departure of other senior officials in the last year, including the CFO, the Chief Risk Officer, the head of the electrification administration, the legal advisor, and the VP of Human Resources.