Harel Insurance Investments Ltd. (TASE: HARL) announced this morning that its management estimates the embezzlement at Harel Investment House Ltd. at NIS 120 million, on the basis of investigations to date. The company said that its insurance policy covered embezzlement by employees, up to a ceiling of $25 million per incident. The company added that a preliminary review, even without the full details being known, indicated that the policies covered the present case of embezzlement.
Harel said the investigations were still incomplete, and that the current figure is only an estimate. The company added that it was examining asset balances in the accounts allegedly used to carry out the embezzlement, and that money related to the embezzlement, if any, might lower the total amount stolen.
Harel also sent a calming message regarding the source of its coverage. It said that, although subsidiary, Harel Insurance Co. Ltd., provided the embezzlement policy, most of insurance risk was backed by leading international reinsurers. Therefore, the proportion that will be paid by Harel “is very low”, and, consequently is unlikely to affect the company’s operating results.
Harel also sought to calm its clients, saying that company money was embezzled, not the money of its clients or the clients of subsidiaries.
Yesterday, the Tel Aviv Magistrates Court extended the remand of an associate of Guy Vaisman, the former Harel Investment House deputy CEO and CFO suspected of the embezzlement. The friend is believed to been an accomplice of Vaisman and to have received NIS 46 million of the NIS 120 million stolen. The court would not allow the friend’s name to be disclosed.
Published by Globes [online], Israel business news - www.globes.co.il - on April 19, 2007
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