Bank Discount has taken the unusual step of filing a police complaint against Boaz Chechik, the former CEO of its subsidiary Cal. The complaint is apparently tied to Chechik's connections to clearing companies that worked with Cal, and the alleged conflicts of interest this created.
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While the bank filed its complaint only recently, the police have been involved in the matter for a while. After Chechik left the credit card company in February, Cal cut ties to clearing companies that had been created during his tenure. In response, the clearing companies sued Cal.
Cal then began to investigate Chechik's connections to the clearing companies and their executives and owners, and its findings apparently led it to file the police complaint.
Two months ago, when the companies' annual financial statements were published, Discount CEO Giora Offer found himself defending Cal amid the accusations. Discount owns 72% of Cal. At the time, Offer said he had no knowledge of ethical issues at the Cal. "The suspicions of integrity issues are baseless. The affair under investigation involves the actions of people at Cal vis-a-vis bodies outside Cal in the clearing industry," Offer said at the time.
One of the clearing companies working with Cal had been PayGea, a Canadian company that entered the Israeli market in 2008. It is controlled by Nathan Jacobson. PayGea Israel clears online transactions, mail-order transactions and telephone transactions.
Cal had a business relationship with an Internet clearing venture connected to PayGea and apparently indirectly owned part of that venture. This means that Cal benefited from revenues the venture made from its business relationship with Cal - which could cause a conflict of interests.
"The meaning of the police complaint is that the internal review found something that should be investigated. This doesn't say anything yet," Discount stated yesterday.