Bank Leumi Announces It Will Not Forgive Nochi Dankner's Personal Debt

Following public pressure, the bank's CEO - Rakefet Russak Aminoach – goes back on a plan to forgive some NIS 150 million of the debt of the IDB controlling shareholder.

Bank Leumi announced Friday that it will renege on a plan to forgive some of the personal debt of IDB controlling shareholder Nochi Dankner. The proposed debt rearrangement would have erased NIS 100-200 million from a total debt of NIS 450 million.

On Thursday, the bank, headed by Rakefet Russak Aminoach, has frozen any such erasure after the banks watchdog, bank supervisor David Zaken, said he would be investigating the matter. The move followed a storm of criticism sparked by an expose in The Marker this week. Among other things, calls have been disseminated, including via Facebook, to boycott the bank over its leniency with the business baron.

On Friday, the bank released a statement to the press: "The CEO, Rakefet Russak Aminoach, instructed the professional team dealing with the matter to work to exhaust all options in order to collect the debt."

The two sides had agreed on write-offs amounting to between NIS 100 million and NIS 200 million of the estimated NIS 450 million in debt Dankner's Ganden Holdings has with the bank. The deal also included an injection of over NIS 100 million cash to Leumi and extensions granted by the bank for the repayment of the remaining debt balance.

Closely-held Ganden, which belongs to Dankner and his family, owns 47% of IDB Holding Corporation, the sprawling investment company whose interests include Cellcom Israel, Clal Insurance and Super-Sol. IDB Holding is itself facing serious debt problems and is trying to negotiate a settlement with bondholders.

The arrangement was conditional on a NIS 75 million in fresh capital being injected into Ganden. That money is supposed to come from the Argentine tycoon Eduardo Elsztain, who last year bought a 10% interest in Ganden for NIS 100 million and is expected to buy another 21% for NIS 280 million.

The bailout has also been contingent on Dankner's reaching a settlement with IDB Holdings' bondholders and on Ganden reaching a debt agreement with Mizrahi Tefahot Bank, which has some NIS 85 million in loans outstanding to the company.

Moti Kimche