MIDDLE EAST:Israeli prime minister Ehud Olmert was questioned for more than four hours in Jerusalem yesterday as part of a criminal investigation into whether he interfered in 2005 with the state auction of Bank Leumi Le-Israel Ltd.
Mr Olmert, who was finance minister at the time, is suspected of helping a potential bidder for Leumi, Israel's biggest bank by assets. Mr Olmert denies any wrongdoing. He will be re-interviewed tomorrow, police said.
"He was questioned on suspicions of breach of trust," police spokesman Micky Rosenfeld said. Police investigators sat with Mr Olmert for almost 4½ hours at the prime minister's residence in Jerusalem, Mr Rosenfeld said.
Corruption allegations have dogged Mr Olmert (62), although he has never been convicted of a crime. Mr Olmert is also the subject of a criminal investigation over a house in Jerusalem for which he is alleged to have paid a below-market price. Cerberus Capital Management LP and Gabriel Capital Group won the bidding for a 10 per cent stake in Leumi almost two years ago with an offer of 2.74 billion shekels (€481 million).
The New York-based hedge funds were unable to obtain government permission to exercise their option to buy an additional 10 per cent stake and become the bank's largest shareholder.
Mr Olmert is alleged to have assisted Australian billionaire Frank Lowy during bidding for Leumi. In the end, Mr Lowy never submitted a formal bid. Israeli police questioned him in Australia as a witness and not a criminal suspect.