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Israel's Olmert faces suspicion over bank sale

Written by: Staff
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JERUSALEM, Oct 24 (Reuters) Israeli authorities said today they were examining the 2005 privatisation of Bank Leumi after Israeli media raised new corruption allegations against Prime Minister Ehud Olmert related to his role in the sale.

An Israeli Web site said Olmert as finance minister at the time tried to help two overseas-based businessmen, whom it described as his personal friends, in the bidding for Israel's second largest bank. Olmert's office declined to comment.

The Justice Ministry released a statement it said was specifically ''in response to reporters' queries after the report on the Web site News First Class''. It said prosecutors were looking into material related to the sale.

''At this stage, no decisions have been taken, no criminal proceedings of any kind are under way in the matter and police are not involved,'' the ministry said.

Neither of the businessmen purchased the bank. Its controlling interest was sold in 2005 to US investment group Cerberus-Gabriel for 2.47 billion shekels (540 million dollars).

Israel's main government watchdog, the State Comptroller's Office, is already looking into the terms of Olmert's purchase of a Jerusalem apartment in 2004 and whether he appointed cronies to a business authority that year.

Olmert's office has reserved comment on the real estate deal, pending an official approach by authorities. It has denied any wrongdoing in appointments to the Small and Medium-Sized Business Authority in 2004, when Olmert was industry minister.

No charges have been brought in the investigations but they have drawn headlines at a time when Olmert's popularity has plunged over his handling of the recent Lebanon war.

In the latest affair, the Justice Ministry said that several weeks ago, the State Comptroller's Office transferred documents regarding the Bank Leumi sale to Attorney-General Menachem Mazum.

''The attorney-general, following standard procedure, gave the material to the State Attorney's Office for examination and preparation of an opinion as to how to deal with it,'' the ministry's statement said.

Reuters AB DB2158

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