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Bank Leumi Media Monitoring 02/23/15

English Language Press - There are no relevant clips to report at this time.

Swiss German Language Press

1. Overview: US-Swiss Tax Dispute

   Feb 23, 2015 | 20min.ch

   Chief Executive of HSBC, Stuart Gulliver, has held a Swiss bank account since 1998, Swiss media reports, quoting the British newspaper The Guardian.

Israeli Press

2. The Hidden Interest of the Director Appointed to Examine the Leumi Affair

   Feb 22, 2015 | The Marker (Hebrew)

   By Sivan Aizescu
   
   
   On Thursday Bank Leumi notified the Tel Aviv district court that the bank’s board has decided to set up a non-binding claims commission to examine if there are grounds for filing claims against the former executives who led the bank into trouble with the US authorities
3. Bank Leumi Concerned About Public Image

   Feb 23, 2015 | Calcalist (Hebrew)

   By Moshe Gorali
   
   
   Bank Leumi is asking not to hang its dirty laundry out in public. Therefore it filed an application with Judge Kabub to stay the proceedings of the derivative action and allow for the board of the bank to propose a solution designed by the “independent claims commission” that the bank will establish
4. "My Family Used Bank Leumi to help them Launder Money"

   Feb 20, 2015 | The Marker (Hebrew)

   By Associated Press
   
   
   Sam Antar, the former CFO of the American electrics chain, Crazy Eddie that went bankrupt at the end of the 70’s after the family was involved in money laundering spoke out in a column published on CNBC.
5. The Tale of Bank Leumi (2)

   Feb 20, 2015 | News 1 (Hebrew)

   By Yaakov Shtraher
   
   
   On the January first I published an article of similar title in which I listed the failures of the management and conduct of bank Leumi official with regards to the US authorities and in general.
6. The Board of JCT is Attempting to Torpedo the Division of Leumi Shares

   Feb 23, 2015 | The Marker (Hebrew)

   By Sivan Aizescu
   
   
   Advocate Shirel Guttman-Amira, formerly the director of the Corporate Finance Department at the Israel Securities Authorities turned to the Jewish Colonial Trust (JCT) board in a letter in which she warns them of the damages that will be caused if they attempt to torpedo the process of distribution of Bank Leumi shares.

Bank Leumi Media Monitoring 02/23/15

English Language Press - There are no relevant clips to report at this time.

Swiss German Language Press

1. Overview: US-Swiss Tax Dispute

   Feb 23, 2015 | 20min.ch

   -        Chief Executive of HSBC, Stuart Gulliver, has held a Swiss bank account since 1998, Swiss media reports, quoting the British newspaper The Guardian. The information was confirmed by a spokesperson at HSBC, who said Gulliver used the account to deposit wage supplements. The spokesman states that for reasons of confidentiality, the money was deposited in the name Panamanian firm during the time when Gulliver lived and worked in Hong Kong.

   She added that the account was reported to the British tax authorities, and Gulliver did not draw any tax benefits from it. She did not mention how much money Gulliver held in his Swiss account. According to The Guardian, the sum amounted to USD 7.6 million in 2007. The Swiss media notes that the British article does not suggest Gulliver acted illegally.

   These banking details emerged as part of leaked HSBC files published by The Guardian and other media outlets, revealing misconduct at the bank’s Swiss subsidiary.

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Israeli Press

2. The Hidden Interest of the Director Appointed to Examine the Leumi Affair

   Feb 22, 2015 | The Marker (Hebrew)

   By Sivan Aizescu

   On Thursday Bank Leumi notified the Tel Aviv district court that the bank’s board has decided to set up a non-binding claims commission to examine if there are grounds for filing claims against the former executives who led the bank into trouble with the US authorities, that resulted in the bank paying NIS 1.5 billion in fines in order to close the investigation without criminal charges, with regard to the aid that the bank gave its US clients in evading tax in the US.

   Leumi informed the court that the non-binding commission will discuss the issue for four months and will appoint five lawyers including three who do not serve in any capacity at the bank. The committee will be headed by the former president of the Tel Aviv District Court, Ori Goren, retired Jerusalem district court judge Orit Efaal-Gabay and  expert in the corporate matters and corporate governance at Tel Aviv University Professor Sharon Chanes. The commission will also include two board members Professor Yedidyah Stern and Advocate Haim Samet.

   Leumi informed the court in a letter that the two board members are independent and hold no conflict of interest as they were appointed to their positions at the bank after the period in which the bank was under investigation by the US authorities.

   However in the contradiction to Bank Leumi’s claims that Haim Samet has no conflict of interest, in practice he has a clear interest in not filing a suit against the former officers. Samet was a director of the bank during the years 1995-2000, a period that according to officers in the bank, Leumi was also aiding its US clients in evading tax. The bank was not required to admit this to the Americans and because of the statute of limitations, it was not investigated.

   ·        Samet also served on the board of Bank Hapoalim from 2007. Bank Hapoalim is also under investigation for aiding in tax evasion and it is possible that similar penalties will be imposed on the bank Hapoalim it is likely that a derivative action will be filed against officers of Hapoalim by the shareholders. Thus Samet has no interest in creating a norm that the board members who served during the relevant period should be punished.

   ·        Samet also served together with Maor and Raff for five years, thus this also alludes to the fact that he is not independent.

   ·        Bank Leumi responded saying that the commission is made up for the most part of members that are unconnected to the bank, however if the court decides that the seat of one of the members needs to be debated, it will do so. 

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3. Bank Leumi Concerned About Public Image

   Feb 23, 2015 | Calcalist (Hebrew)

   By Moshe Gorali

   Bank Leumi is asking not to hang its dirty laundry out in public. Therefore it filed an application with Judge Kabub to stay the proceedings of the derivative action and allow for the board of the bank to propose a solution designed by the “independent claims commission” that the bank will establish. The matter is up for discussion today.

   The basis for the forming of the commission is clause 195 of the companies law that allows a company three options for response to an application of a derivative claim; to delay, (then the claim goes to the court for approval) to refile itself, and the road the bank took which is to take action or make a decision that would potentially result in the dropping of the suit.

   In September 2013 judge Kabub prepared for the first request when he confirmed the mechanism acceptable in the US. Ayalon Insurance Company set up a commission of board members to examine the derivative claim that was filed by the shareholders against the controlling shareholders. Kabub ruled that in Israeli there is also room to set up a commission of this sort but speaks of a special case that demands special justifications. In the US the no court approval is required but Kabub ruled that here it is necessary that a judge approve and consider whether the commission is required, approve its assembly and guide its operations.

   ·        The author claims that it is not clear why the judge needs to approve the board. The bank should be able to consult with whomever it wishes.  

   ·        The bank is claiming that the request is suitable considering the that the agreement was signed only a month and half ago. However Galia Maor was informed by the US of the intention to investigate tax evasion in 2011. Why was the commission opened only after the punishment was received and not when the received the warning?

   ·        The bank will benefit from minimizing public damage. The bank admitted to its guilt but the officials were excluded from this – this now promises to be a great battle between the officials and the bank.

   ·        The committee is supposed to be friendlier to the bank as it is not only considering suing the officers as an outcome, but taking other issues into consideration such as company reputation. 

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4. "My Family Used Bank Leumi to help them Launder Money"

   Feb 20, 2015 | The Marker (Hebrew)

   By Associated Press

   Sam Antar, the former CFO of the American electrics chain, Crazy Eddie that went bankrupt at the end of the 70’s after the family was involved in money laundering spoke out in a column published on CNBC. In the column he states that in the years of the money laundering, the 70’s and 80’s, Bank Leumi was the preferred bank because they knew it would not only turn a blind eye but help them with laundering the money. He complained that it took the US regulators 25 years to act against the bank and other banks that operate the same fraud.

   Bank Leumi admitted last year to helping its American clients launder their capital. In the agreement they are to pay USD 400 million to the regulators in the US as well as help with the continued investigation and investigations against other banks. However, according to Antar the authorities in the US were aware of the illegal activities of Bank Leumi and other foreign banks for many years; one reason for this is that he himself informed them of this.

   “But I know that the FBI and SEC have known about this for decades because I personally flagged it to them in 1989, when Crazy Eddie was busted for fraud and I was trying to avoid prison time. (Which I did.):   wrote Antar, who today consults for the regulators and companies in fraud investigations, in a column on CNBC.  In a video he also explains exactly how the bank helped with the fraud.

   “During my criminal career at Crazy Eddie, my family used Bank Leumi to help them evade taxes, hide assets, and launder money because of their exceptional client services and discretion. From 1971 to 1984, I was intimately involved in my family's scheme to underreport cash revenues and evade income taxes at Crazy Eddie when we were a private company” wrote Antar. He explained how the bank sent employees from Israel to New York in order to help open accounts in Israel and launder money through other countries and return the money back to the private accounts of the family in the US so that the employees in the US could say they didn’t know, because they really didn’t know it was happening.

   ·        Bank Leumi did not send a response to CNBC just turned them to their official statement stating they are cooperating with the US department of Justice and New York department of financial services.

   ·        The US department of justice stated that they follow the facts and evidence and cannot attest to decisions taken over 25 years ago. The SEC did not immediately comment.

   ·        The article continues to discuss the money laundering of Crazy Eddie 

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5. The Tale of Bank Leumi (2)

   Feb 20, 2015 | News 1 (Hebrew)

   By Yaakov Shtraher

   On the January first I published an article of similar title in which I listed the failures of the management and conduct of bank Leumi official with regards to the US authorities and in general.

   Since then the bank has continued to make mistakes and provoke the wrath of the US. As a reminder the bank entered a trial period after which if it has not improved its ways it will face financial and other sanctions.

   The bank attempted to collect from the insurance a negligible amount, and thus exempt individual officers from claim. Payments of the insurance company for these matters raise premiums drastically so that in the end it would land up losing.

   ·        During negotiations with the US, the board of directors hired a team of lawyers that examined the conduct of the directors managing the crisis and found it to be faultless. Any fool understands that this was nothing but a waste of money. If only the examination had been external to the shareholders it may have resulted in an objective statement.

   ·        Since the initial consultation of former and current executives at a lodge paid for by Bank Leumi, the bank’s board of directors asked the court for permission to set up a committee to examine the behavior of former executives.

   ·        Is it possible that the committee which consists of two board members that were not in their positions during the time of the affair will reach conclusions that condemn their colleagues and require the return of bonuses?

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6. The Board of JCT is Attempting to Torpedo the Division of Leumi Shares

   Feb 23, 2015 | The Marker (Hebrew)

   By Sivan Aizescu

   Advocate Shirel Guttman-Amira, formerly the director of the Corporate Finance Department at the Israel Securities Authorities turned to the Jewish Colonial Trust (JCT) board in a letter in which she warns them of the damages that will be caused if they attempt to torpedo the process of distribution of Bank Leumi shares.

   The address to the board members was done in the name of the C the Company for the Location and Restitution of Holocaust Victims’ Assets and the Administrator General who together hold 40% of the JCT shares, in light of the upcoming general assembly that is taking place on the first of March in which the shareholders will vote on whether to divide the company’s main asset- 4.97% of the shares of Bank Leumi as a dividend in kind.

   ·        In an attempt to thwart the decisions the board of the JCT decided to grant voting rights to the World Zionist Organization who holds basic shares and effectively gave them power of 50% of the votes. In the letter it was stated that this decision is contrary to the corporation document of the JCT which state that basic shares does not confer the right to vote in decisions on the distribution of dividends.

   ·        The shareholders are concerned with the possibility that the WZO will work to delay the distribution due to conflict of interest. The Company for the Location and Restitution of Holocaust Victims’ Assets states that the shares are necessary for helping needy holocaust victims and thus needed urgently.

   ·        Institutional shareholders have expressed support for the distribution of Leumi shares 

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