Former Hapoalim execs to repay NIS 2.25m

Zion Kenan and Yair Seroussi  credit: Eli Dassa
Zion Kenan and Yair Seroussi credit: Eli Dassa

The repayment is of bonuses to managers and directors held responsible for the bank's embroilment in the US tax evasion affair.

Six former senior managers at Bank Hapoalim, among them former CEO Zion Kenan and former chairperson Yair Seroussi, have agreed to pay a total of NIS 2.25 million to settle a derivative action in the affair of aid by the bank to US customers in evading tax.

In 2020, Bank Hapoalim reached a settlement with the US authorities in which it admitted aiding US customers evade taxes, and paid a $900 million penalty. Mizrahi Tefahot Bank and Bank Leumi also reached settlements in the US in similar cases. The money that the former officers of Bank Hapoalim agreed to pay had been paid to them as bonuses.

In the past year, the sides have attempted to reach agreement on accordance with the recommendations of a committee appointed by the Bank Hapoalim board and headed by former Supreme Court justice Yoram Danziger.

Under those recommendations, the insurance companies of the bank’s former officers would have paid $135 million, while the officers themselves would have paid nothing at all. The District Court has not yet handed down a ruling on the settlement.

Dr. Harel Primack, a shareholder in Bank Hapoalim, opposed the settlement, through Adv. Einat Solnik, a lawyer on behalf of Lobby 99, which is a non-profit organization that states as its mission that it represents the economic interests of the public against corporations and wealthy individuals. Lobby 99 said in a statement: "We are glad that the filing of our objection to the shameful settlement by Bank Hapoalim has led to an important, precedent-setting achievement, and that the senior officers who were responsible for the huge debacle will now have to pay up from their own pockets.

"Thanks to our opposition, the court and the attorney general have issued an important message to the whole market, that there is justice and accountability, and that the public’s money is not a free-for-all. At the same time, we think that the sum of NIS 2.25 million is far from adequate in relation to the scale of the damage that their conduct caused, and we are considering our next steps."

The action was filed in March 2015 against 66 former and current senior managers and directors at Bank Hapoalim by a minority shareholder in the bank represented by Adv. Aviram Rahimi.

Published by Globes, Israel business news - - on July 3, 2023.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.

Zion Kenan and Yair Seroussi  credit: Eli Dassa
Zion Kenan and Yair Seroussi credit: Eli Dassa
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