Israel's Central Bank Halts Probe of Into Senior Banker Sexual Misconduct

The move is intended to allow the police to complete their investigation of former CEO of Bank Hapoalim Zion Kenan.

Zion Kenan
Zion Kenan. Moti Milrod

The country’s central bank is suspending its inquiry into the conduct of Zion Kenan, the former CEO of Bank Hapoalim, over sexual harassment allegations made against him by a female bank employee. She alleged that the harassment took place while she and Kenan were on a business trip to the Central Asian republic of Kazakhstan about 10 years ago.

The banking supervision department of the Bank of Israel issued a statement Tuesday saying that “so as not to harm the proceeding being conducted by the Israel Police on aspects within its area of authority, the inquiry by the supervisor [of banks] will only be completed after the end of the police proceeding.”

The allegations against Kenan became public in November, when it was disclosed that the bank had conducted secret arbitration proceedings with Kenan’s accuser presided over by retired Judge Steve Adler, who found that Kenan had not sexually harassed her.

Adler nonetheless recommended that she be paid about 6 million shekels (roughly $1.5 million) in compensation to resolve the matter. The bank’s chairman at the time, Yair Seroussi, came in for particular criticism for not informing the Bank of Israel banking supervisor or the bank’s controlling shareholder, Shari Arison, about what had transpired in the matter.