Hong Kong says Frenkel arrested in duty free incident

Account contradicts parts of his version of events that undermined his Bank of Israel governor candidacy.

By
August 7, 2013 19:25
2 minute read.
Jacob Frenkel

Jacob Frenkel370. (photo credit: Wikimedia Commons)

The Hong Kong Department of Justice on Wednesday contradicted portions of Jacob Frenkel’s account of an alleged 2006 duty free shoplifting incident that ultimately undermined his candidacy to return to the Bank of Israel as governor, Channel 10 reported.

Honk Kong Department of Justice spokesperson Josephine Chan told Channel 10 that Frenkel was arrested over allegedly shoplifting a garment bag on November 19, 2006. He was brought before a judge, and the legal proceedings were closed only on January 11, 2007.

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Frenkel had maintained that he had only been detained, and that the incident elicited an apology from the Hong Kong authorities over the apparent misunderstanding. Chan said no such apology was offered. Likewise, contrary to Frenkel’s assertions, Chan said the Hong Kong authorities did not thank him for not suing over the embarrassing incident.

However, Chan also confirmed that Frenkel’s explanation of the alleged shoplifting - that he had thought a colleague had paid for it before leaving the duty free shop - had remained consistent since the incident. “Given the documents and materials submitted,” she said, “it was decided not to continue with the legal proceedings against him, and the issue ended on January 11, 2007.”

The hullabaloo over the incident led Frenkel, who served as Bank of Israel governor from 1991-2000, to withdraw his candidacy for a third term. The subsequent choice for the position, Leo Leiderman, also withdrew his nomination, apparently fearing a similarly harsh public vetting.

In the meantime, Prime Minister Binyamin Netanyahu and Finance Minister Yair Lapid have yet to name another candidate. Netanyahu is reportedly attempting to vet multiple candidates before announcing a choice in order to avoid further embarrassment, but his office would not disclose what steps he was taking. In the meantime, Karnit Flug, who served as deputy to former governor Stanley Fischer before he stepped down in June, has filled the role of acting governor.

Although the bank’s monetary committee, a vestige of Fischer’s reforms, continues to function in deciding the interest rate, the uncertainty over the next governor has somewhat rattled the market. Although the bank continued Fischer’s policy of intervening in the foreign exchange market, hoping to moderate the shekel’s incessant strengthening streak, the shekel’s value relative to other currencies continued to rise, breaking a two-year record this week.

“The delay in appointing a governor, given market forces in the foreign exchange market is inviting pressure to strengthen the shekel,” said Rafi Gozlan, chief economist at IBI investment.

The Knesset Spokesman announced Wednesday that the legislature will hold a meeting on August 28, during its summer recess, to discuss the lack of a Bank of Israel governor. MK Merav Michaeli (Labor) submitted the requisite signatures on Tuesday. The meeting will also deal with haredi towns being taken off the government's list national priorities.

Lahav Harkov contributed to this report.


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