The banks involved in the fees affair apparently have no intention of negotiating a settlement with Antitrust Authority director general Ronit Kan over the fine she wants to impose on them as part of an agreed order. Kan's deadline for the banks' response is tomorrow. The banks are accused of sharing information about fees.
By the deadline, each of the five banks involved - Bank Hapoalim (TASE: POLI; LSE:80OA), Bank Leumi (TASE: LUMI), Israel Discount Bank (TASE: DSCT), Mizrahi Tefahot Bank (TASE:MZTF), and First International Bank of Israel (TASE: FTIN1;FTIN5) - are due to notify Kan if they accept the agreed order and pay the fines. If they fail to do so, Kan can issue a civil ruling declaring that the banks colluded on fees. Such a declaration could serve as evidence in a civil suit against the banks.
Last week, under the agreed order, Kan offered the banks a NIS 290 million fine, as follows: NIS 80 million each on Bank Hapoalim, Bank Leumi, and Discount Bank; NIS 30 million on First International Bank; and NIS 20 million on Mizrahi Tefahot Bank.
The difference between the fines is significant, and breaks the banks' common interest. However, knowledgeable interests think that there is, in fact, no practical way for the banks to break ranks, because a civil suit against one bank must necessarily name another bank, even if the other bank consented to the agreed order. Under these circumstances, any bank that might want to consent to the agreed order would still be exposed to a civil suit, rending the consent pointless.
The sources added that the high fines Kan has imposed frustrate almost any attempt at negotiation. One source said, "After setting such high amounts, Kan cannot allow herself to make a substantial retreat."
As things stand at the moment, the case will likely reach the courts because if a civil suit is filed, the banks will appeal Kan's decision to the Restrictive Trade Practices Tribunal.
Published by Globes [online], Israel business news - www.globes-online.com - on January 20, 2009
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