The Bank of Israel today unexpectedly announced that it had suspended its probe in the affair of former Bank Hapoalim (TASE: POLI) CEO Zion Kenan until after the Israel Police completes its inquiry.
"The Banking Supervision Department is making it clear that its probe into Bank Hapoalim's handling of a sexual harassment complaint against the former CEO has reached an advanced stage. In order to avoid damage to the Israel Police inquiry into aspects for which it is responsible, the Banking Supervision Department will complete its examination only after the police proceeding is finished," the Bank of Israel stated.
It is believed that the policy inquiry in the affair, in which a former bank employee alleged that Kenan had sexually harassed her on a trip to Kazakhstan a decade ago, is making progress. At the same time, as far as is known, the police have not yet decided whether to turn their inquiry into a criminal investigation, and the inquiry is still going on. In any case, some indication recently received by the Bank of Israel led it to suspend its examination until the police finish their inquiry. It is believed that the police are also checking the bank's conduct in the affair.
The former Bank Hapoalim employee's complaint involves an event in December 2006, meaning that the statute of limitations applies to it. At the same time, in sexual offenses, the police are inclined to relax this restriction by accepting complaints beyond the statute of limitations period.
The former employee made the matter public after deciding to leave the bank, when a dispute emerged concerning the amount of compensation to which she was entitled. In the framework of her discussions with the bank, she mentioned the event, and Bank Hapoalim decided to appoint Judge (ret.) Steve Adler as an arbitrator in the matter.
In his arbitration ruling, Adler stated that he found that no such attack had occurred, but ruled at the same time that the employee was entitled to more compensation because of the difficult working conditions in Kazakhstan. The employee received an estimated NIS 2-3 million. This ruling aroused public criticism, because the payment was regarded as hush money.
The affair, which was revealed on Ilana Dayan's "Fact" program last November, aroused a storm when it was discovered that then-Bank Hapoalim chairman Yair Seroussi had reported the complaint to neither the Bank of Israel nor the Bank Hapoalim board of directors. Seroussi subsequently resigned as chairman.
The Bank of Israel announced that it would assess the affair, particularly the bank's handling of the matter. At the same time, the police announced that it would conduct an inquiry. The Bank of Israel stated that although its inquiry had almost been completed, it had decided to suspend it, pending a police decision in the matter.
Published by Globes [online], Israel Business News - www.globes-online.com - on January 10, 2017
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