Bank Hapoalim Negotiating Early Exit for Chairman Amid Probe

Bank Hapoalim Ltd., under scrutiny over its handling of a sexual assault allegation, is negotiating an early departure for its chairman, Yair Seroussi.

Israel’s largest bank filed a one-sentence statement Monday with the Tel Aviv stock exchange saying it was “in talks to shorten” Seroussi’s eight-year term, which expires in August. A spokeswoman for the bank said Seroussi declined to comment.

Israeli media reported earlier Monday that Seroussi was considering resigning.

Hapoalim is under investigation by the Bank of Israel, as the country’s financial supervisor, over its handling of a sexual assault allegation against former Chief Executive Officer Zion Kenan. A spokesman for the central bank, Yoav Soffer, didn’t immediately reply to a text message Monday seeking comment. Kenan’s lawyer also didn’t immediately return messages.

The case came to light earlier this month, when Israeli media reported that an employee accused Kenan of sexually assaulting her during a work trip abroad in December 2006. Hapoalim has said a retired labor judge engaged to arbitrate the case found no evidence of assault. 

The employee, who later left the lender, did receive an increase in severance pay at the recommendation of the arbitrator, who said she was earning less than she had been promised. But “there is no connection between the compensation and the investigation,” bank spokeswoman Ofra Preuss said on Nov. 2.

The judge “checked the allegation of sexual harassment, and stated unequivocally that no sexual harassment or maltreatment took place,” Preuss said.

Kenan resigned earlier this year after Israel introduced a law capping pay for bank executives. Hapoalim is controlled by billionaire Shari Arison, who owns 20.1 percent of the shares through her investment arm, Arison Holdings Ltd.