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This week the die will be cast regarding the situation at Bank Leumi: Will the group of foreign investors from Cerberus-Gabriel gain control, or will the bank's privatization fail once again, so that it remains in the state's hands for who knows how long?

Cerberus-Gabriel bought just under 10 percent of the Leumi's shares a year and a half ago, and since then the Bank of Israel, which must approve the purchase, has has been busy looking at the bid. The purpose of the examination is to determine whether the foreign group is appropriate to control the Israel's second largest bank. If the central bank gives its approval, Cerberus can then buy another 10 percent of Leumi from the state and by doing so, take control of the bank.

The situation of Cerberus, which last week had its bid to buy the Chrysler auto manufacturer from Daimler-Benz accepted, is like that of someone who bought only one shoe in a shoe store, and then spent the following year and a half walking around with it trying to prove that its worthiness of buying the second half of the pair.

Everybody knows what you can do with only half a pair of shoes, and that is why the tension, pressure and suspense are rising before the important date of May 24, when Cerberus' option to buy the next 10 percent runs out.

If the deal falls through, and that is what seems most likely to happen now, then the accusations will fly from all sides.

At this stage, Cerberus is asking for an extension that would allow it to present all the documents necessary to receive approval from the Bank of Israel. It is possible that this is a tactical ploy, intended to keep the information secret until the very last moment, in hope that the state will cave in under pressure and grant the extension.

The present process of selling off the state's share of Leumi is actually the first such experiment of its kind, which was intended to overcome the previous failed attempts. The previous process was based on an examination of the bidders, who, only if they were found to be acceptable, could be granted approval to purchase the bank. In the present case, the state decided to sell off a chunk of Leumi, and then would determine whether the potential buyer was acceptable. Only then was the next chunk, which would allow the purchaser to take over control of the bank, offered up for sale.

This is a roundabout way of doing things, especially when added to a generally problematic privatization process. The state may very well miss out on a group of the highest level foreign investors, who could raise the level of competition and professionalism of Israeli banking significantly.

The person who was supposed to be responsible for the sale of Leumi was Finance Minister Abraham Hirchson, but he has suspended himself due to the criminal investigation of him currently under way.

In this case, the responsibility moved to Prime Minister Ehud Olmert, in his role as acting finance minister. But Olmert is also under a cloud of suspicion, due to the criminal investigation of him that is being conducted on precisely this matter, the Bank Leumi privatization tender. Olmert is suspected of having acted to change the terms of the Leumi tender, so that his friend, the billionaire Frank Lowy, would win.

Nonetheless, even if Olmert is out, someone must handle the matter and make a decision. Enter Rafi Eitan, the minister responsible for pensioners affairs. Eitan needs to take into account what Cerberus officials said last week during their visit here, that certain local businessmen are finding the idea of Cerberus controlling Leumi uncomfortable.

It seems that the comment from the hedge-fund executives were a reference to some of Leumi's biggest borrowers, who today receive preferential treatment from the bank. These businessmen feel at home at Leumi and enjoy special connections there - and they are likely to lose out on this special status if Cerberus gains control.

Are these comments directed at the likes of businessmen such as Nochi Dankner, Zadik Bino and the Ofer family? All of them have quite complicated and valuable dealings with Bank Leumi, which include partnerships and financing agreements. Maybe Cerberus is a bit uncomfortable with the fact that Leumi is both a partner and a big lender to Bino in Paz Oil. It is also a partner and lender to the Ofer family in the Israel Corporation, and with Dankner in Cellcom.

If this is true, then it must certainly reflect what Cerberus thinks about how the bank does business with these partners - and borrowers.

Cerberus might not necessarily cut such ties if it were to take over, but at the very least it could provide an example of the very interesting battle that could be shaping up: unsentimental foreign investors against the rich local tycoons who have enjoyed an open door policy at Leumi until now.