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Like the protests that drew crowds of hundreds of thousands two years ago, the campaign against Dankner’s debt write-off by Bank Leumi gathered pace on the Internet after the Israeli media caught wind of the deal. Thousands joined a “Boycott Bank Leumi” Facebook page.
The Bank of Israel, the central bank, now says it plans to investigate the cancelled deal.
A spokeswoman for Leumi said that, since cancelling Dankner’s debt break last month, the bank had not entered into new negotiations with him and was “continuing all options to collect the debt”.
Dankner’s firm Ganden said debt restructuring deals like the one it was planning with Leumi have always been a normal part of business in Israel and other Western countries. The companies that are part of Dankner’s IDB group have historically paid all their debts on time and are still working on a bank deal, said a spokeswoman.
“We are convinced we can also reach a fair and agreed arrangement with the banks,” she said.
Dankner’s IDB conglomerate is one of 10 large business groups that control about 30 percent of the market value of public companies in Israel.
Such conglomerates make use of a “pyramid” corporate structure, using tiers of holding companies to allow a powerful shareholder to hold sway over a business empire while actually owning only a fraction of equity in the companies it controls.
In Dankner’s case, Ganden is a private company through which he controls IDB Holding Corp, which in turn controls Israel’s largest supermarket chain Super-Sol, Clal Insurance and leading mobile phone operator Cellcom .
IDB declined to comment on its corporate structure.
A businessman at the top of a pyramid can control a company at the bottom with less than 10 percent of the capital.