Matthew Bronfman
Matthew Bronfman resigns IDB board
Bronfman and two other board members asked to step down following decision to replace directors who had ownership interests in bank. Crain's paper reports IDB has been conducting investigation against Bronfman, following suspicion he used his position to benefit himself
Matthew Bronfman, the controlling shareholder at Israel Discount Bank (IDB), resigned from his post as chairman of the Discount Bank Corp and from the board of IDB's New York branch on Friday.
According to business newspaper Crain's New York, Bronfman quit following a board inquiry into whether he used his position to benefit himself.
According to the report, Bronfman and another director, Michael Rubinoff, resigned after being asked to step down, while a third board member, Chairman Leonard Grunstein, was voted off after he refused to resign.
A spokesman for IDB said that the bank's parent company ordered the NY board to replace any directors who had an ownership interest in any part of the company, an order which applied to the three resigning board members. The remaining members are either independent or are bank employees.
Crain's reported that at the beginning of the year, IDB hired the services of the law firms Sullivan and Cromwell to conduct an inquiry into Bronfman's activity at the bank. The paper reported that according to allegations, "Bronfman persuaded an IDBNY loan officer to lend nearly $1 million to one of Mr. Bronfman's partnerships, without telling the board."
However, it said that associates of Bronfman claimed the loan was made before he became director or bough the controlling interest in the bank.
The investigation also examined allegations that Bronfman used a floor of IDB offices in NY for his other businesses, and that meddled in bank operations.
