Bank Crisis Hits Some of Israel’s Largest Industrial Enterprises

The crisis of Tibor Rosenbaum’s financial empire is shaking the foundations of some of Israel’s largest industrial enterprises. They are linked to Rosenbaum’s fate through investments by the Israel Corporation in some of Rosenbaum’s many commercial ventures in Europe which have either collapsed or are in serious trouble.

The Israel Corp. a holding company established in 1968 by Jewish industrialists and financiers to create capital for the expansion of Israeli industries, owns or holds substantial interests in some of Israel’s largest firms. These include the Zim steamship lines and the Atta Mills, Israel’s largest textile manufacture.

Workers at the Atta plant called a meeting today to discuss the money due them should Atta be forced to shut down. They got assurances from the plant’s director general, Amos Ben Gurion. that their pension funds and severance pay were safe. He also said there was no question of Rosenbaum’s creditors taking over Atta. Histadrut, meanwhile, has instructed its Comptroller to find out if any Histadrut enterprises have been involved in Rosenbaum’s bank or other enterprises. The investigation was initiated following rumors that Histadrut’s giant construction cooperative. Solel Boneh, may have had some connection with Rosen baum’s companies.

EXTENT OF LOSSES UNDETERMINED

So far it has been impossible to determine the extent of the losses that may have been suffered by the Israel Corp. and its Israeli holdings. Israel Corp. funds were invested in some of the 100 companies Rosenbaum established in Vaduz. Lichtenstein, a favorite tax haven for international financiers. It also reportedly had deposits in Rosenbaum’s International Credit Bank in Geneva which closed today. The lack of bookkeeping in Rosenbaum’s Lichtenstein companies is making it difficult to ascertain the extent of financial losses suffered by the Israeli firms.

Finance Minister Yehoshua Rabinowitz. who just returned from Washington where he attended a meeting of the World Bank, said today that while deposits by the Israel Corp. in the International Credit Bank in Geneva should be investigated and those who did wrong should be punished, due consideration must be given to the fact that the Israel Corp. is a successful enterprise that has developed profitable industrial projects.

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