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New Turning Point in Rosenbaum Israel Corporation Affair

Legal and financial circles here are discussing with interest the possible repercussions of a Tel Aviv court judgement last week on the Israel Corporation-Tibor Rosenbaum affair. Tel Aviv District Court Judge Shlomo Lowenberg ruled last Thursday, with the consent of all the parties, that civil action taken against Geneva banker Tibor Rosenbaum by the Israel Corporation, in Israel. should now be dropped.

The Corporation last year got the court to block Rosenbaum’s assets in Israel, estimated at $15 million, following the collapse of his Geneva based International Credit Bank and its allied Inter-Credit Trust, registered in Vaduz, Lichtenstein. The collapse left the Israel Corporation Israel’s prestige finance company, and its associated companies. $29 million out of pocket, because deposits they had placed with Rosenbaum could not be recovered.

In a subsequent criminal action here, the Israel Corporation director-general Michael Tzur, was sentenced to 15 years imprisonment on charges of embezzlement, bribery, fraud and currency offenses. Tzur’s appeal is due to be heard by the Israel Supreme Court in March and legal observers here believe that last week’s judgement by Judge Lowenberg may affect the appeal.

EXAMINATION SHEDS DIFFERENT LIGHT

“What had seemed black at first,” the judge wrote, “appears not so on closer examination.” He was referring to the Israel Corporation’s allegation that Tzur and Rosenbaum had conspired to transfer $8.5 million of Israel Corporation monies to the Rosenbaum trust company without the knowledge of the Israel Corporation board of directors.

“After matters were examined in the Israel Corporation books,” the judge wrote, “it has now become clear that what were previously thought to be transactions conducted through the personal contact only between Tzur and Rosenbaum were actually recorded regularly in the Israel Corporation books and were open to inspection.”

Judge Lowenberg noted that these transfers were effected over a period of three years, in open correspondence between the two companies, were reported to the Israeli authorities and were known to the Corporation’s auditors. Rosenbaum had no reason to suspect, the judge continued, that the transfers had been made by Tzur acting alone and without authorization.

JUDGEMENT MAY HAVE REPERCUSSIONS

The judgement may have repercussions, too on the private criminal prosecution which Israel Corporation chairman. Baron Edmond de Rothschild of Paris, has brought against Rosenbaum in the Swiss courts. That prosecution is also based on the $8.5 million transfers. Rosenbaum’s lawyers are certain to argue that the Tel Aviv judgement clears their client of criminal complicity in a conspiracy and to press, therefore, to have the charges dropped.

Rothschild’s criminal action against Rosenbaum is the only criminal proceeding that the joined financier face. The Swiss writing authorities, having examined the affairs of his crashed empire, have not, to date, pressed any criminal charges. They seem to have concluded that his losses, set at 345 million Swiss Francs, were the result of a string of financial misfortunes rather than of breaches of the law.

In Tel Aviv, the Israel Corporation lawyer Amnon Goldenberg asked Judge Lowenberg Monday to amend his judgement in order to make it clear that he was not saying the Israel Corporation directors had a hand in the transfers. The application was postponed pending the return of Rosenbaum’s lawyer, Avraham Biran, to Israel. But Judge Lowenberg stated that this implication was not his intention.

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