Attorney General Applies for Receiver of Defunct Bank

Attorney General Meir Shamgar applied to the Tel Aviv district court today for the appointment of an official receiver who will wind up the affairs of the defunct Israel-British Bank seized by the Bank of Israel two weeks ago. The court is due to decide tomorrow on the appointment–and all observers are certain its decision will be positive.

Shamgar did not cite in numerical terms the extent of the bank’s losses but said the Bank of Israel, through the official receiver, would pay out bona fide creditors and depositors as it had undertaken. The Bank of Israel is meanwhile applying for receivers to be appointed to several other Williams-owned concerns in Israel. In some cases the intention is not to liquidate the concerns but to sell them as-going concerns if possible. The bank itself, however, will eventually be liquidated.

The final decision to wind up the bank was taken this week by the special committee which the Cabinet had appointed to consider the fate of the bank when it could not meet its liabilities. The committee was made up of Finance Minister Yehoshua Rabinowitz. Justice Minister Haim Zadok and Moshe Sanbar. Governor of the Bank of Israel.

The bank had been the country’s sixth largest. The extent of its liabilities are not yet known and investigators are still working their way through the mound of books and ledgers to determine the losses which will accrue–for the most part–to the Israeli taxpayer. The government has resolved to cover the debts owed by the bank to all its foreign and local creditors and depositors–save firms owned or associated with the Williams family of London, which owned the bank.

PROBE POSSIBLE CRIMINAL ASPECTS

Meanwhile the former managing director of the bank, Yehoshua Ben-Zion, son-in-law of the late Nahum Zeev Williams and brother-in-law of the bank’s chairman Harry Landy of London, was remanded Tuesday by a Tel Aviv magistrate for a further 15 days as police continue their investigation into possible criminal aspects of the bank’s collapse. Ben-Zion, already in custody for nine days, is suspected of fraudulent misrepresentation of the bank’s affairs to the Bank of Israel, and also of offenses against the foreign currency regulations.

The government has not yet decided if it will guarantee the losses of the London subsidiary of the Israel-British Bank which is also teetering on the brink of collapse. That bank too is heavily in debt–with the exact figures not yet known as a team of independent auditors are still going through its books. The results of that investigation will be transmitted to the Bank of Israel and to the Bank of England–and then the Israel government will have to decide whether to cover the London bank’s losses too.