Bank Hapoalim CEO Zion Keinan has been questioned by the National Fraud Squad on suspicion of assisting in fraudulent behavior and of breach of trust.
In a notice to the Tel Aviv Stock Exchange on Tuesday, Bank Hapoalim said that Keinan had been questioned under caution by the police Monday evening.
The investigation relates to illegal loans to former Bank Hapoalim chairman Dan Dankner that allegedly were approved by Keinan. Keinan was head of Hapoalim’s corporate division at the time of the loans.
The Bank of Israel said the ongoing investigation would not affect Bank Hapoalim’s operations.
“Further to the reports about the police questioning of Bank Hapoalim CEO Keinan, the supervisor of banks announces that he is being kept informed about this matter and is following it closely,” the Bank of Israel said in a press statement. “Bank Hapoalim has a broad professional management team that ensures the bank’s ability to continue functioning properly despite this development. As the police investigation is still in progress, the supervisor cannot relate to the details of the case.”
Last year, the police initiated an investigation against Dankner on
suspicion of misconduct and breach of trust in connection with his role
at the bank from 2005 to 2009. The police investigation is said to be
examining transactions Dankner was involved in concerning the
authorization of extensions of credit of millions of shekels and
potential conflicts of interest because of his holdings in companies
including financially troubled Elran Investments.
Dankner stepped down as chairman of Bank Hapoalim in late July 2009
following a two-month clash with regulators over what the Bank of Israel
called “flaws” in management. Dankner was replaced by Yair Seroussi.
The central bank has refused to provide Bank Hapoalim with any specific
reasons for Dankner’s forced ouster.
Keinan is a 30-year Hapoalim veteran whose rise is something of a
Cinderella story. He started his career at the bank as a teller, served
in a number of managerial positions in the logistics and human resources
division, and steadily worked his way up before joining the board in
Keinan was appointed CEO in March 2009, replacing Zvi Ziv, who resigned over disagreements with Dankner about the bank’s future.