Police Are Investigating Bank Hapoalim

Police have launched an investigation into the activities of Bank Hapoalim and “another bank” for allegedly bypassing foreign currency regulations, a police spokesman confirmed Tuesday. The other bank was not immediately identified.

According to Yediot Achronot, Bank Hapoalim is suspected of having set up dummy corporations overseas to make foreign currency loans in easy terms to companies associated with the Histadrut and the kibbutz movement, such as the large construction company Solel Boneh.

The paper reported that heads of Bank Hapoalim and directors of the companies allegedly involved in the illegal activities will be questioned by police within the next few days. Giora Gazit, former chairman of the bank’s Board, already has been questioned by police, as was Uzi Vardi-Zer, who is in charge of the bank’s overseas department.

Gazit resigned in April as head of the bank, in accordance with the recommendations of a special commission investigating the 1983 collapse of bank shares and the ensuing panic on the Tel Aviv Stock Exchange. The commission, headed by Supreme Court Justice Chaim Beisky, recommended that the heads of Israel’s five leading banks be forced to quit.

The open investigation reportedly follows months of a secret investigation.

Bank Hapoalim spokesman Amnon Herzog said the bank is supplying police “with all relevant information.” He said the investigation deals with loans given to the kibbutz movement three years ago and is “mostly of a technical nature.”

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