Bank Leumi wrote off NIS 600,000 in Sharon family ranch debts

Bank Leumi erased NIS 600,000 in debts owed by the Sharon family's Sycamore Ranch, according to the findings of a Haaretz investigation. The write-off came in 1996, when Ariel Sharon was appointed minister of national infrastructures in Benjamin Netanyahu's government.

The debts were for interest and fees that accumulated in the ranch's accounts for the estimated NIS 3 million line of credit the ranch held at that time. Also, Haaretz discovered that the write-off was made with the full knowledge of Leumi's CEO, Galia Maor, who followed the matter closely, along with other senior officials .

Last week Sharon said he would cancel the planned proposal to distribute Leumi shares to the general public, and decided instead to sell the bank's controlling interest. A large amount of resources and effort were expended on the share distribution plan, promoted by treasury Accountant General Yaron Zelekha. However, there were also many who opposed the plan, including the new Governor of the Bank of Israel, Stanley Fischer.

For years, Sycamore Ranch's bank accounts have been handled by the Sderot branch of Leumi. At the time, the branch was managed by Emanuel Aton, who has since left Leumi. The account was handled by the bank's commercial department. Also handling the affair was the bank's division for special credit, headed at the time by attorney Nahum Biterman, who is now the Leumi's chief legal adviser.

The NIS 600,000 debt waiver was made as a result of claims by the ranch's representatives that they were overcharged and fees were excessive. The claims were based partially on research done by an economic advisory firmthat specializes in such matters, probably the Netzarim company.

The accepted procedure at Leumi for handling such matters is transfering the examination to the unit that investigates customer complaints, headed at the time by Avinoam Dor, who left Leumi two years ago.

However, it is not clear if this is how the matter was handled. According to one of the scenarios, the matter was handled by a special ad-hoc team set up to investigate the matter, which included senior officials in the banking division.

The team decided to wipe out the debts, based on an economic opinion presented by the Sharon family's attorneys. The write-off was approved by an opinion provided by the bank's internal auditor, Yossi Hurvitz.

Haaretz's investigation has shown that in this case Leumi preferred not to request a legal opinion on the matter - as it did for other similar complaints made by customers.

Banking sector sources say that erasing debts arising from such fees and overcharges is accepted among business customers. The Sycamore Ranch is a long-time customer of the Sderot branch, and the bank is therefore interested in aiding such a customer, according to senior banking officials.

But in this case, the debt forgiveness comprised 15 to 20 percent of the total debt - an exceptional amount by any standard.

Also, the debts in the Sderot branch served as the basis for the Cyril Kern affair, which is still under police investigation.

Leumi stated that it does not comment on matters relating to customer accounts.

Haaretz was unable to receive a reply from the Prime Minister's Office.

	Aerial view of the Sharon family's Sycamore Ranch.
	Photo by: Ofek