Personal 'Mudslinging' at Bank Hapoalim Raises Concern

Senior economic sources in Jerusalem are worried about the recent mudslinging against former Bank Hapoalim chair Shlomo Nehama and other interpersonal crises at the bank.

These crises "could divert the management's attention from the work they should be doing," say the sources. "The bank is suffering from high management turnover and the subprime crisis, which hit Hapoalim harder than it did any other [Israeli] bank. Now is certainly not the time for personal disputes."

These fears were voiced on the background of news that senior Hapoalim executives are accusing Nehama of taking classified bank documents.

These accusations could lead to Nehama's disqualification by the supervisor of banks at the Bank of Israel to serve as Bank Leumi board chair in the future -if he is chosen to head one of the groups that will contend for the purchase of the state's controlling stake in Leumi.

A Bank Hapoalim spokesperson confirmed that the bank has its suspicions against Nehama and gave the central bank "complete, detailed information shortly after the event."

Even so, Hapoalim did not file a complaint against Nehama with the supervisor of banks.

Although certain information was relayed to the supervisor of banks for examination, immediately thereafter bank officials asked the Bank of Israel not to do anything with the information and not to open an investigation - because by then Hapoalim had reached an understanding with Nehama concerning their dispute.

Furthermore, it turns out that the supervisor of banks has dismissed the conjecture that the suspicions ostensibly disqualify Nehama from chairing an Israeli bank.

On the contrary, the supervisor of banks highly esteems Nehama and his appointment to chair a large Israeli bank would be welcomed.

Sources in Jerusalem are still worried by the new "verbal wrangle" surrounding Hapoalim, which erupted just a few months after the previous spat - concerning which of the bank's senior executives was responsible for the subprime losses.

"This is not how we would expect the bank to conduct itself," said the sources, stressing that while the bank is dealing with the subprime crisis, it managers should not be distracted by interpersonal tiffs.