Prof. Yaakov Frenkel was all set to assume his new post, taking over as governor of the Bank of Israel from Prof. Stanley Fischer, who decided to step down. While Fischer still required final approval, this was a formality since he was tapped by the prime minister and finance minister.

However, amid reports that Frenkel was involved in an unfortunate incident in a Hong Kong airport duty free shop, Frenkel decided to pass the appointment.

Frenkel came under increasing scrutiny following reports that he stole a garment bag from the duty free store and was arrested. Frenkel explained there was a “misunderstanding” and he worked it out with police, adding the latter apologized for the unfortunately misunderstanding and even thanked him for not filing for damages due to the embarrassment caused him.

It appears that his decision to drop out as the incoming head of the BOI was compelled by more than he revealed. According to Haaretz, it was more than a “misunderstanding” as Frenkel was arrested and appeared before a magistrate court in Hong Kong on the same day of his arrest. The report is based on information provided to Haaretz by the Hong Kong Ministry of Justice.

The letter received by Haaretz totally contradicts Frenkel’s version of the events, adding police or other Hong Kong authorities never apologized to Frenkel as he claims, and yes, he was arrested and appeared in court. The letter states the crime was committed on November 19, 2006. The court during the hearing on that day set a date for the next proceeding on January 11, 2007.

He was represented by an attorney who explained he looked at the garment bag which he decided to purchase. He had to go so he asked a friend to pay. Later on, following his arrest, he learned the friend who was to have paid did not do so.

The letter adds “Authorities here never apologized to Frenkel and we never thanked him for not suing us seeking damages”.

(YWN – Israel Desk, Jerusalem)