The National Bank of Egypt (NBE), owned by the Egyptian government claims Israel's General Custodian expropriated the bank's share in the management and profits from the King David Hotel. The bank is now suing the General Custodian for $78 million in damages.
In 1929, Palestine Hotels Ltd purchased 4.5 acres of land on Julian's Way in Jerusalem (now the King David Street). Albert Mosseri, a wealthy banker from Egypt, who was at the time director of NBE paid close to half of the construction costs from his pocket. Another 46 percent was covered by other wealthy Jews from the Cairo community.
The bank claims to have invested the remainder, purchasing 693 shares of Palestine Hotels Ltd. between 1934 and 1943.
When the State of Israel was established, Palestine Hotels was renamed King David Hotel. Mosseri sold all his shares to Federmann Enterprises, who manages the Dan hotel chain, and in 1958, the bank's shares in the hotel were seized by the General Custodian.
NBE never received dividends
The Egyptian bank's attorney in Israel, Jasser Ashraf, told Yedioth Ahronoth: "The general Custodian sold the bank's stocks to private shareholders in 1993 after the bank was declared a 'missing' party." The bank claims never to have enjoyed the fruit of its stock; it never received profits or dividends.
The bank is requesting the court to cancel its absentee status and order $78 million in damages. "This sum is the initial investment converted to current values, with compound interest over 70 years, and the estimated profits over the period relative to the Egyptian bank's share of the hotel," Ashraf explained.
"We filed the claim several days ago and we are optimistic that the Israeli government will respond positively, as the Egyptian government did in the case of the Cecil Hotel in Alexandria."
Several days ago, Yedioth Ahronoth reported that an Egyptian court ordered the Cecil Hotel in Alexandria be returned to its Jewish owners, the Metzger family from the UK.
The Ministry of Finance has not yet answered to the claim. "Neither the Finance Ministry nor the General Custodian have received this claim. We are not familiar with the subject," the Ministry stated. "If and when such a claim will be received, we will study it and respond to the court."
Michal Goldberg contributed to the report