Daily Israel Report

Bank Leumi Caves, Cancels Deal with Tycoon

After much public protest, Bank Leumi announces cancellation of deal with tycoon Nochi Dankner.
By Elad Benari, Canada
First Publish: 4/19/2013, 9:14 PM

Bank Leumi
Bank Leumi
courtesy

After much public protest, Bank Leumi announced on Friday afternoon that the deal with tycoon Nochi Dankner, which would have seen the bank erasing most of the businessman’s debt, was cancelled.

The decision was made during a meeting of Bank Leumi’s Board of Directors, during which the bank’s CEO, Rakefet Russak-Aminoach, said that under the present circumstances the bank will not be able to implement the planned debt settlement with Dankner.

Bank Leumi now intends to act in other ways in order to try and collect the money owed by Dankner.

A statement issued by the Bank's management at the end of the meeting said that "the outline of the arrangement, which had not been finally agreed upon in any case, has been nullified and is no longer on the agenda."

Israelis expressed outrage over the agreement this past week, and Opposition leader MK Shelly Yechimovich wrote a letter to David Zaken, who is responsible for oversight of Israel’s banks, calling on him to nix the planned debt erasure.

Yechimovich also gave an interview to Army Radio on Wednesday in which she called on customers of Bank Leumi to close their accounts with the bank, if it pursues the agreement with Dankner.

"I call on significant and also on smaller customers of Bank Leumi to inform the bank that if it intends to erase Dankner’s debt, they will close their accounts with it,” she said.

Following the pressure, Bank Leumi initially said it would simply freeze the deal with Dankner until the Supervisor of Banks concludes an inquiry he started in the case.

The pressure, however, continued, with many Israelis joining a Facebook group which called for Bank Leumi’s customers to close their accounts with the bank if the deal with Dankner goes through.

While the bank would not outright say this, the public’s outrage over the deal is likely what caused it to back down.

(Arutz Sheva’s North American Desk is keeping you updated until the start of Shabbat in New York. The time posted automatically on all Arutz Sheva articles, however, is Israeli time.)