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The Tale of Bank Leumi (3)
Mar 1, 2015 | News 1
By Yaakov Shtraher
A full week hasn’t passed and Bank Leumi, in its usual fashion continues with its misses. -
Controversial Provisions
Mar 1, 2015 | Globes (Hebrew)
By Irit Avissar
For several weeks there have been intensive discussions for Bank Mizrahi Tefahot and Bank Hapoalim with regard to the investigation by the US authorities. -
Tax Evasion: USD 228 Million Derivative Claim Filed Against Hapoalim Executives
Mar 1, 2015 | Globes (Hebrew)
By Irit Avissar
A derivative action was filed on Sunday against the Bank Hapoalim officials past and present with regard to the investigation by the US authorities under the suspicion that the bank aided US clients in evading tax. -
Zionist Organistion: "The Company for the Location and Restitution of Holocaust Victims’ Assets Trying to Devour Leumi Stock"
Mar 1, 2015 | The Marker (Hebrew)
By Sivan Aizescu
The Zionist Organization, the founding shareholder in Jewish Colonial Trust (JCT) sent a stern letter the Company for the Location and Restitution of Holocaust Victims’ Assets ahead of the general shareholders meeting set to take place today (Sunday) at 16:0
English Language Press - There are no relevant clips to report at this time.
Swiss German Language Press - There are no relevant clips to report at this time.
Israeli Press
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Mar 1, 2015 | News 1
By Yaakov Shtraher
A full week hasn’t passed and Bank Leumi, in its usual fashion continues with its misses. Before they even got to court, it was published that Professor Hannes, one of the proposed committee members was an adviser for Judge Khaled Kabub’s doctoral dissertation. The Bank was quick to announce that Professor Hannes had completed his position in that capacity, but the judge stated that the Professor is indeed still being used as an adviser. Additionally, it was revealed that the director and proposed committee member Advocate Chaim Samet has a conflict of interest, as he was a director of Bank Hapoalim in the period for which Hapoalim is under investigation. The bank was forced to replace the two but had insisted that the two directors would be members of the committee.
The current situation is has follows: Any directors in their positon form before 2011 cannot be used in the committee because they were directors during the period when the bank broke US law. What the public doesn’t know is that they were appointed by the committee of the Advocate Margalit Nof who has stated in an interview that decisions were made based on recommendations of former CEO Galia Maor. So, it would be difficult for the directors to visit the period of Maor when they owe their positions to her. Moreover she was involved in the approval of their reappointment at the end of terms.
Margalit Nof explained this puzzling practice in that Maor needed to work with the board and thus it was necessary that there would be chemistry between them. She just forgot that the directors are one level above the CEO. Even the directors in the committee that need to consolidate the banks conduct before the court are influenced by weakness in the makeup of the board because they could be attacked by other directors when their membership needs to be renewed by the committee headed by Justice Ayala Procaccia. This committee includes members including two bank directors that are expected to be investigated by Judge Goren’s committee who might recommend to imposing sanctions on these directors.
- The committee is weakened by the choice of members who are at the mercy of the board members in the future.
- Bank Leumi did not pay bonuses this year mainly as a result of the astronomical fines paid to the US. The managers responsible for the affair may be forced to return their bonuses but nothing will happen to their salaries.
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Mar 1, 2015 | Globes (Hebrew)
By Irit Avissar
For several weeks there have been intensive discussions for Bank Mizrahi Tefahot and Bank Hapoalim with regard to the investigation by the US authorities. The pressure between the two sides intensified when the Securities Authorities also intervened in this matter, then it was discovered that the banks made provisions and didn’t report them.
This past weekend it was decided that Bank Hapoalim is expected to set USD 50 million aside and Mizrahi Tefahot, USD 20 million. Most of the amount has been set aside from the second quarter and this was not disclosed. Disclosure will be made in the next financial quarter. How did these unreported provisions come to be, and what is expected to happen from here?
1. The Bank of Israel demanded that Hapoalim and Mizrahi Tefahot make provisions, however, the banks thought it was not right yet to make provisions as it may be seen as an admission of guilt. The banks also argued that other foreign banks did not make provisions until the final settlement. The Bank of Israel wanted to prepare a safety net but heeding the arguments of the banks agreed not to disclose this. The banks thus stated that no provisions have been made because they cannot yet evaluate the potential damages.
2. The provisions set aside are not dramatic in comparison to the fine of bank Leumi and are based on the formula set by the US government with the Swiss government on the amount of penalties to be paid by a bank that chose to settle.
3. The securities exchange revealed the provisions had been set aside: After learning that provisions had been made, the exchange commission demanded full disclosure. According to sources in the banking system, the Bank of Israel in any case intended to disclose these provisions in the upcoming financial reports. The details of bank Leumi’s fine was published in December and it was learnt that it was based on this formula. Once it was understood that Hapoalim and Mizrahi Tefahot would have to pay a fine based on this formula and there was no longer the excuse of not being able to evaluate.
4. The damage of the banks however is only at USD 70 million. In the case of Bank Leumi, the formula accounted for only 40% of the fine and as time passes the US just raises the bar of fines to the banks.
For additional coverage (Hebrew):
http://www.globes.co.il/news/article.aspx?did=1001014497
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Tax Evasion: USD 228 Million Derivative Claim Filed Against Hapoalim Executives
Mar 1, 2015 | Globes (Hebrew)
By Irit Avissar
A derivative action was filed on Sunday against the Bank Hapoalim officials past and present with regard to the investigation by the US authorities under the suspicion that the bank aided US clients in evading tax. The claim was filed by minority shareholders of the bank represented by attorney Aviram Rahimi.
The suit was filed against 66 executives past and present (who held positions during the time for which the bank is under investigation) and against two accounting offices; Somekh Chaikin and BDO Ziv Haft.
Officers against whom the claim was submitted are members of the board and management for the relevant period. Among them are the chairmen and CEOs of the bank, past and present Yair Seroussi Zion Kenan, Shlomo Nehama, Zvi Ziv, Danny Dankner and his cousin Nochi Dankner, who was former vice chairman of the bank
· Haim Samet currently a member of the board of bank Leumi and formerly a member of Leumi’s proposed independent commission was also on the list.
· The claim amounted to USD 228 million and is based in part on the calculations made from Bank Leumi’s fine.
· Bank Hapoalim has not yet reached a settlement with the US nor are they yet in talks with the US. However, in the case of Bank Leumi, a claim was also filed before the settlement was conlcuded.
For Additional Coverage (Hebrew):
http://www.calcalist.co.il/local/articles/0,7340,L-3653535,00.html
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Mar 1, 2015 | The Marker (Hebrew)
By Sivan Aizescu
The Zionist Organization, the founding shareholder in Jewish Colonial Trust (JCT) sent a stern letter the Company for the Location and Restitution of Holocaust Victims’ Assets ahead of the general shareholders meeting set to take place today (Sunday) at 16:00. On the agenda of meeting is the issue of Bank Leumi shares to be distributed as dividends in kind.
JCT is the holding company whose main asset is the 4.97% of the Shares of Bank Leumi. The Company for the Location and Restitution of Holocaust Victims’ Assets holds about 25% of the shares of JCT. It is claiming that in light of the low market price that the company in relation to the value of the Bank Leumi shares, there is a need to distribute those shares as dividends so that the JCT shareholders can hold the Leumi shares directly an save the administrative costs of the JCT.
The Company for the Location and Restitution of Holocaust Victims’ Assets wants to distribute the shares in order to sell its shares and use the money to assist Holocaust survivors.
The Zionist organization hired the attorneys Lipa Meir that responded on their behalf to the process of the distribution of Bank Leumi shares. The Zionist Organization did not provide an economical or legal response to the attempt to distribute the shares but rather emphasized the Zionist and historical values.
· The letter stated that it is well known that the JCT was a holding company and those that purchased JCT shares knew the main asset was Leumi shares. The letter asks if the shareholders have the right to destroy JCT and the idea that led to its establishment.
· The article reminds the reader that Bank Leumi was established by the Zionist Organization according to Herzl’s vision of Zionism by the JCT, who controlled the bank before the banking crisis of 1983. After which the banks shares were nationalized and controlled by the state.
For Additional Coverage (Hebrew):
http://www.globes.co.il/news/article.aspx?did=1001014431
English Language Press - There are no relevant clips to report at this time.
Swiss German Language Press - There are no relevant clips to report at this time.
Israeli Press
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