The Israel Police Fraud Investigation Unit has launched an
investigation against the managements of Bank Hapoalim and Bank
Leumi, on suspicion of offences against the Banking (Licencing) Act.
The police are concentrating on the investigation of a number of
acquisition transactions in which the banks are suspected of
providing assistance in the form of credit.
It was reported to Globes that the main thrust of the
investigation is directed at Amot Investments company, in which
Bank Hapoalim holds 13%, and Packer Steel and Ellern investments,
in which control was acquired by subsidiaries of Bank Leumi, namely
Africa Israel and Migdal respectively.
As stated, Bank Hapoalim holds 13% of the shares of Amot. the
balance of the shares are in the hands of a series of provident
funds, most of them managed by Bank Hapoalim. Bank Hapoalim has a
controlling share in the company, and the bank accordingly appoints
its management and authorizes its investments. It is suspected that
the bank is responsible for extending credit for financing its
activity, in prima facie contravention of the Banking Law.
Bank Hapoalim stated in response, that although it is aware of the
investigation, the bank views itself as being estopped from
commenting on the subject, so as not to adversely affect the
progress of the investigation. The bank believes the investigation
will ultimately show that it has committed no offence.
The comment of Bank Leumi was that the bank both acts and
reports as required by law