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US Clients Accuse Hapaolim Bankers of Helping them to Avoid Taxes
Mar 11, 2015 | The Financial Buzz
By John Kendrick
Bank Hapoalim's clients have testified against the bank when they asserted that the bankers adopted a proactive role in US tax evasion processes. -
Court Approves Leumi's Request to Establish Independent Commission of Inquiry
Mar 11, 2015 | Calcalist (Hebrew)
By Anat Roeh and Tomer Varon
Tel Aviv District Court Judge, Khaled Kabub approved Bank Leumi’s request to set up an independent commission to discuss the implications of the tax evasion affair. However, the judge made it clear that the recommendations will not be binding on the court. -
Chairman of Leumi on Blackmail Case: Publication Would Cause Chaos in Banking System
Mar 11, 2015 | The Marker (Hebrew)
By Sivan Aizescu
The Chairman of Bank Leumi sent a letter to the state prosecutor Shai Nitzan in November that reveals the panic that gripped the upper management of the largest bank in October, after the bank received a blackmail email from a former employee at Leumi card.
Bank Leumi Media Monitoring 3/12/15
English Language Press
Swiss German Language Press - There are no relevant clips to report at this time.
Israeli Press
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US Clients Accuse Hapaolim Bankers of Helping them to Avoid Taxes
Mar 11, 2015 | The Financial Buzz
By John Kendrick
Bank Hapoalim's clients have testified against the bank when they asserted that the bankers adopted a proactive role in US tax evasion processes. This testimony blows holes in the bank's claims that its penalty exposure should be less compared to other Israeli banks.
Major role
The clients of the bank recounted on December 17 about the alleged role of Nadav and David Kalai - two tax advisers of the Israeli bank. Both of them were instrumental in steering the clients to Hapoalim.
The New York and US State authorities reached a settlement with Bank Leumi in December, with the latter consenting to a $400 million penalty pay. Hapoalim, however, has told the Israeli regulators that it has not received any communication from American investigators concerning the matter from 2011. It also added that unlike Mizrahi Tefahot Bank and Leumi, there were no particular allegations against it.
Murky deals
This has been belied by Moshe Nativ, a citizen of Israel presently living in California. He testified in court about the time he approached David Kalai for advice. This was regarding the taxes imposed on the money he earned through selling WinNet, his startup company, in 2000. The latter suggested that Nativ deposited a majority of that money into a Luxembourg located Hapoalim account.
Nativ revealed to the court that he was advised by Kalai to deposit approximately $2 million of $2.4 million deposited in Luxembourg. The money was to be kept in a Hapoalim account in a foreign company name to avoid the taxes. He made the allegation that Kalai also made arrangements to meet with one Hapoalim banker who had all the forms prepared to be signed.
It has been alleged by Nativ, that a Hapoalim banker assisted him in setting up the offshore company. The banker also suggested a name. In 2003, the bank even recommended – twice - to change the name and also the domicile of the company. Nativ said that the bank even took care of all applicable arrangements.
Similar claims were made by Alex Yazlovsky, another Hapoalim client. Yazlovsky made the allegation that Nadav Kalai provided him the way to open foreign bank accounts through an offshore company. This step will conceal money from the eyes of the tax authorities. He made the claim that the bank even flew over executives to the US from Israel to assist him opening the account.
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Court Approves Leumi's Request to Establish Independent Commission of Inquiry
Mar 11, 2015 | Calcalist (Hebrew)
By Anat Roeh and Tomer Varon
Tel Aviv District Court Judge, Khaled Kabub approved Bank Leumi’s request to set up an independent commission to discuss the implications of the tax evasion affair. However, the judge made it clear that the recommendations will not be binding on the court.
According to the bank the purpose of the commission is to examine the demands, for the most part those of the derivative actions, to sue the officers and auditors of the bank as well as whether to pursue the desired legal action against the bank in light of all the events of the tax evasion affair.
Kabub announced his decision today, o order the delay of the derivative action by four months until after the committee has completed its deliberation and published its recommendations. However the judge clarified that the committee should be seen only as advisory to the board and not as a delegator of power to the board.
- This is in light of the current limitations in company law regarding the powers that can be delegated to the board. Kabub stated “It will not be a committee that has the authority to make decisions. Its authority is at most to make a recommendation to the board about the appropriate way to operate with regards to the derivative action”.
- The judge stated that the board will have the ability to exercise discretion as to whether or not to adopt the recommendations and that the recommendations are not binding on the board.
- The bank received its wish of delaying the derivative action by four months and the commission is now free to start working. However, in the end the commission does not bind the court or the board of directions
- The committee no includes Dr Samer Haj-Yehia and Dr. Lea Paserman Josefov who replace Haim Samet and Professor Sharon Hannes
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Chairman of Leumi on Blackmail Case: Publication Would Cause Chaos in Banking System
Mar 11, 2015 | The Marker (Hebrew)
By Sivan Aizescu
The Chairman of Bank Leumi sent a letter to the state prosecutor Shai Nitzan in November that reveals the panic that gripped the upper management of the largest bank, after the bank received a blackmail email from a former employee at Leumi card, at the end of October. The email claimed that he had the information of about a million and a half bank customers as was revealed on channel two tonight (Wednesday).
Leumi turned to the police immediately and involved the supervisor of banks Dudu Zaken. It held an urgent meeting with the state prosecutor. The demands of the Blackmailer were not only for money but for immunity for criminal proceedings for the act of extortion.
The event brought great concern to the bank and the supervisor that large amounts of customers would withdraw funds due to loss of confidence in the system.
· The former employee Eliran Rozans was eventually caught in Thailand but the letter sent by Brodet shows the extent of pressure felt at the top of the bank.
· Brodet feared that the information would be published online. To demonstrate the seriousness of his intentions, Rozans showed the bank he had access to a file of 350 blocked credit cards.
· Brodet stated that it will bring huge damage to the customers of the bank, even if the full database isn’t published. The public hysteria that could be brought on by the idea of publication could result in a loss of confidence in the banking system regardless of the realization of threats.
· The fear was a “run on the bank” – a rush to withdraw deposits. This could have resulted in liquidity problems at the bank. The public’s deposits at the bank are not liquid, but are used to extend credit - resulting in the downfall of the bank. In other words, the harm caused not only to the bank but to customers, who make up about a third of all households and businesses in Israel, and the public at large.
· In light of this fear Brodet did ask the state prosecutor if he would consider grating immunity, Zaken joined Brodet the following day and sent a letter to Nitzan.
· Bank Leumi sent a response stating the letter was sent after a meeting which included the state prosecutor. The letter reflects the worst case scenario and was done in order to prevent any damage to customers.
· The Bank of Israel stated that the supervisor is responsible for ensuring the stability of the system and emphasized that the content of the Chairman’s letter did not reflect the position of the supervisor.
For additional coverage (Hebrew):
http://www.mako.co.il/news-law/legal-q1_2015/Article-98b7f30b90a0c41004.htm
Bank Leumi Media Monitoring 3/12/15
English Language Press
Swiss German Language Press - There are no relevant clips to report at this time.
Israeli Press
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