Finance minister displeased with Dankner debt deal

Bank Leumi had agreed to trim NIS 150 million off amount owed by billionaire

Aaron Kalman is a former writer and breaking news editor for the Times of Israel

Yair Lapid of Yesh Atid and Labor's Shelly Yachimovich in March. (photo credit: Yossi Zamir/Flash90)
Yair Lapid of Yesh Atid and Labor's Shelly Yachimovich in March. (photo credit: Yossi Zamir/Flash90)

Finance Minister Yair Lapid and opposition head Shelly Yachimovich on Wednesday voiced their dissatisfaction over a planned agreement between Bank Leumi and billionaire Nochi Dankner that would see NIS 150 million (over $40 million) of Dankner’s debt to the bank stricken from the ledgers.

(See correction at the bottom of this article.)

In a statement, Bank Leumi said it wouldn’t reveal details about any client, but that it would do all it could to maintain a profitable business and stable credit rating.

Leumi’s decision last week elicited scathing public criticism.

Nochi Dankner (photo credit: Moshe Shai/Flash90)
Nochi Dankner (photo credit: Moshe Shai/Flash90)

Dankner, the owner of Ganden Holdings and a controlling shareholder of  IDB Holdings, shouldn’t be allowed to get away with not paying his debts, Yachimovich wrote on Facebook.

Citing the day-to-day troubles facing people with debts of a few thousand shekels and the lack of flexibility they and small businesses are shown by the banks, 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 Supervisor of Banks David 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.

Lapid, meanwhile, sent a personal request to 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.

(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.)

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