Bank of Israel Starts Ball Rolling to Remove Dankner From Hapoalim

The Bank Hapoalim board of directors will meet again today to formulate a response to the report by Bank of Israel banking supervisor Roni Hizkiyahu.

Hizkiyahu is demanding that Hapoalim suspend the appointment of Zion Keinan as CEO, which the board approved in a lightning-fast procedure when Zvi Ziv resigned from the post last month.

The supervisor of banks is also demanding that the bank establish a search committee to find a different candidate to replace Ziv. Hapoalim has until tomorrow to submit its response to the report.

The central bank, meanwhile, has begun the process of removing Danny Dankner as chairman of the Hapoalim board, in the event that the talks between the Bank of Israel and controlling shareholder Shari Arison do not result in a compromise.

On Thursday, which saw Arison lashing out in a widely-publicized speech against the Bank of Israel and what she called its "creeping nationalization" of the bank, at a Hapoalim board meeting, board member Irit Izakson resigned from her positions on the boards of directors of the Israel Corporation and of Israel Chemicals.

The move could be interpreted as a prelude to Izakson's appointment as Hapoalim chairwoman.

Bank of Israel representatives and Arison have met recently in an attempt to achieve a compromise, but according to observers the central bank has also begun readying the necessary documents for removing Dankner as chairman, just in case. The assumption is that if Bank of Israel governor Stanley Fischer decides not to continue to wait for Arison, Dankner's removal will be effected by the end of May.

In her remarks to the press on Thursday, Arison said that the previous day the Bank of Israel's supervisory body issued an urgent request to Bank Hapoalim to submit the protocols for its handling of loans to two major media outlets as well as the protocols from the stakeholders' committee meetings, according to what it termed a "new, rapid procedure."

These loans were to Haaretz and Maariv.

Knowledgeable sources say that the central bank's investigation focuses on Hapoalim's lending policy toward both of the newspapers.

The Bank of Israel and Arison's spokespersons refused to comment, as did Haaretz publisher Amos Schocken. There was also no comment from Maariv.