Frenkel withdraws as next central bank chief amid ‘shoplifting’ scandal

Intended next governor of the Bank of Israel bitterly cites fuss made over ‘a misunderstanding’ in Hong Kong seven years ago

The man slated to become the next Governor of the Bank of Israel withdrew his candidacy Monday because, he said bitterly, he was fed up with the rampant media hype over what he insisted was an erroneous accusation of shoplifting at Hong Kong airport seven years ago.

Jacob Frenkel notified Prime Minister Benjamin Netanyahu and Finance Minister Yair Lapid that he would not be taking up the position for which he was personally selected by the prime minister just a month ago.

In an interview with Channel 2, Frenkel said he was deeply irritated at the media attention directed at him ever since he agreed to be governor, and the subsequent fuss made over the Hong Kong affair.

It was suggested to him that perhaps there were rivals who had tried to torpedo his appointment.

“In an unreasonable and unbearable manner, a person can be put on the spot, just based on assumptions,” he said.

Frenkel explained that, in the incident at the Hong Kong airport duty free store, he took a large travel bag out of the shop because he thought a female colleague was paying for it on his behalf. “It was a misunderstanding.”

He was stopped by the authorities outside the store “and it was very embarrassing,” he said. But once his colleague came over and explained what had happened, he claimed, “the authorities understood” and made clear that they would not pursue any legal case against him.

“I got on the next plane to Israel,” he continued, insisting that “no one doubts” the accuracy of his explanation.

Ten days ago, Frenkel testified before the committee charged with vetting his appointment and provided his version of events regarding the incident. Committee members, headed by former Supreme Court justice Jacob Turkel, were reported to be awaiting additional material before issuing their decision on his appointment.

Earlier this month Frenkel had said he fully expected to take office in October as scheduled.

Frenkel said then that the matter was “an unfortunate incident” that “stemmed from a misunderstanding” and that ended with an apology to him from the Hong Kong authorities.

Last month Netanyahu and Lapid chose Frenkel, who headed the Bank of Israel for almost a decade between 1991 and 2000 and who currently heads the prestigious banking firm JPMorgan Chase, as the man to replace Stanley Fischer at the helm of Israel’s top economic institution.

Educated at the Hebrew University of Jerusalem and the University of Chicago, the 70-year-old economist has held a number of key positions in top international firms, including AIG and Merrill Lynch. He has also worked in leading international finance organizations, including the International Monetary Fund. He won the Israel Prize for economics in 2002.

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