Zim Integrated Shipping Services Ltd., which is owned by Israel Corp. (TASE: ILCO), controlled by Sami and Idan Ofer is suing Mizrahi Tefahot Bank (TASE:MZTF), which is controlled by Sami's brother Yuli Ofer.
Zim, which is currently in the midst of negotiating a debt settlement, claims that Mizrahi Tefahot repaid a debt worth $9.7 million without its approval. Israel Corp. last night published an announcement that Zim's plans taking legal action against the bank on the subject.
The story began several months ago when Zim transferred a sum of money to one of its Mizrahi-Tefahot accounts in which the bank has the authority to grant credit and offset balances for repaying debts. The credit framework extended to Zim by the bank, which is managed by Eli Yones, amounted to $9.7 million. The bank decided to implement its right to pay debts to the amount that had been transferred to the account.
Zim claims that the money was transferred into the account by mistake and asked Mizrahi-Tefahot to return the money that had been repaid. However, banking experts insist that Zim's demand is problematic. A source said, "If Mizrahi-Tefaot accedes to the request then other clients will come along and say they transferred money by mistake and the bank will be in a problematic situation."
Zim and Mizrahi-Tefahot tried to settle the dispute but could not reach agreement and thus the case is expected to come to court.
Published by Globes [online], Israel business news - www.globes-online.com - on October 26, 2009
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