Yesterday, the Tel Aviv District Court gave legal force to the settlement reached by former Bank Hapoalim executives with shareholders in a derivative action arising from the affair in which the bank paid heavy penalties in the US for having assisted US citizens in tax evasion. Under the settlement, six former senior managers of Bank Hapoalim, among them former CEO Zion Kenan and former chairperson Yaor Seroussi, will together pay NIS 3.56 million to the bank from their own pockets. This is in addition to $135 million that their insurance companies will pay. The NIS 3.56 million will be applied to the bank’s social and community activity.
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Judge Magen Altuvia wrote in the decision: “After weighing all the facts and the arguments of the sides, and the position of the Attorney General and the objector, I find that with the amendment to the settlement, there are grounds for giving it the force of a court ruling.” The amount of the settlement will bear annual interest of 9.57% from February 1, 2023, and will not be recognized as a donation for tax purposes.
The petition for a derivative action was filed by Dr. Shulamit Sharon, a shareholder in the bank, eight years ago. She argued that the banks’ officers had caused it damage when the bank had to pay a penalty of $900 million to the US authorities, after admitting that it had assisted US customers in evading US taxes. Bank Leumi and Mizrahi Tefahot Bank also paid penalties in the affair.
The Bank Hapoalim executives originally agreed to pay NIS 2.5 million, but the judge made approval of the settlement conditional on the amount being raised to NIS 3.56 million.
Published by Globes, Israel business news – en.globes.co.il – on November 2, 2023.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.
