Bank Leumi freezes bailout for billionaire after outcry
Bank says it will let central bank supervisor study plan to let Nochi Dankner erase NIS 150 million debt
Responding to a growing public outcry over a deal to erase a NIS 150 million debt owed by billionaire Nochi Dankner, Bank Leumi said Wednesday it would suspend the agreement until the Central Bank could study the move.
(See correction at bottom of this article.)
Dankner’s Ganden Holdings owes the bank some NIS 500 million in total, and the deal to strike NIS 150 million (about $40.5 million) from the bank’s ledgers elicited an outpouring of anger from politicians, pundits and others on Wednesday.
The bank said it could not release details about the pact, which would see Dankner pay NIS 150 million immediately and amortize the last third of the debt into eight parts, but would wait for supervisor of banks to study the deal and follow the recommendations.
Dankner, who controls IDB Holdings through Ganden, is worth over $1 billion, according to Forbes.
Earlier in the day, Finance Minister Yair Lapid and opposition head Shelly Yachimovich voiced their dissatisfaction over the planned agreement.
Lapid sent a personal request to Supervisor of Banks David Zaken insisting that he conduct an inquiry into the complaints, Army Radio reported. The finance minister was said to be worried not only about the debt itself but also about the manner in which the public would react to the decision to forgive it.
Lapid noted that the trimming of debts for large companies seemed to be a recurring theme in recent years, and that such moves could hurt the public and the country’s economic stability.
Bank Leumi director Yedidya Stern told the radio station that the public needed to separate the individual from his business ventures, since the debt in question was not owed by Dankner but rather by his companies.
Writing on Facebook, Yachimovich said banks only erase people’s debts “in their dreams” — unless they’re Dankner.
The “difference between the average Israeli and those with means is discriminatory,” she stated.
Yachimovich demanded that the Bank of Israel issue clear orders and regulations regarding the ability of banks to forgive debts.
She also called on Zaken to investigate what she called “a conflict of interests,” saying the accountant in charge of overseeing Dankner’s company was the same accountant appointed by Leumi to oversee the deal with IDB.
(Correction: An earlier version of this article incorrectly referred to Nochi Dankner as controlling Israel Discount Bank through Ganden Holdings. In fact, neither IDB Holdings nor Nochi Dankner are controlling shareholders of Israel Discount Bank. We apologize for the error.)
