The financial statement of

Industrial Development Bank (TASE:

INDD.GG

) for the first half of 2002 is one of the wackiest documents to hit the Tel Aviv Stock Exchange for years. By the third line, the bank's CEO Uri Galili and chairman Ra'anan Cohen already admit that it is suffering from "severe liquidity difficulties" that place its survival, and ability to fulfill its commitments, in question.

That's quite some way for a so-called bank to open its financial statement. That isn't a bank, it's a disaster.

A bank whose volume of deposits is far greater than its equity and total liquid assets cannot survive after a comment like that in its report. That is because the customers will all want their money back on the spot. And any customer who hasn't is simply so stuffed with cash that he isn't worried about losing touch with his Industrial Development Bank deposits for a few months.

Further down in the report, the chairman and CEO describe their correspondence with the Bank of Israel and Finance Ministry, again showing that Industrial Development Bank is broke and that it wants the government through the Bank of Israel to bail it out with money for operations.

Then the bank presents its results for the first half, but clearly, the document is of little value at this stage, because it doesn't describe the recent drama. Mainly, the massive withdrawals that began last week and has continued Sunday. Under these circumstances, with the Bank of Israel balking at transferring more money until the bank's agreement with the treasury is finalized, it is unlikely that the Industrial Development Bank will open for business next Sunday.

But the really annoying part of the managerial review in the bank's financial statements in the second to last paragraph.

In the last paragraph, the CEO and chairman write that the board expresses its esteem of the new chairman and CEO for their ceaseless efforts since taking charge.

The previous paragraph states how much those efforts cost: "In an employment agreement signed with Dr Cohen the bank undertook to employ him for a four year term. The chairman of the board's salary us NIS 49,500 plus expenses, as is usual".

Ra'anan Cohen chaired Industrial Development Bank for less than three weeks. The question is, what will happen to him if and when the bank's management is taken over by a liquidator or receiver, which is very likely to happen.

Answer: Cohen will apparently continue to get his paycheck and ride in his managerial car, for the next four years.

An agreement is an agreement, and Ra'anan Cohen has an agreement with the bank, that explicitly states he is to get paid for four years.

The financial statement does not bring his employment agreement in full. But we may assume that some clause or other explicitly states that in the event of involuntary termination, Cohen gets every sou he's owed which translates into a fifty-thousand shekel a month golden parachute.

NIS 50,000 a month times four years is NIS 2.4 million.

The bank's spokesperson did not explicitly concur that is what will happen. Nor did he explicitly deny it.

CEO Galili has a similar agreement in place, with pay of NIS 58,200 a month over three years. If sent packing, he gets an NIS 2.1 million golden parachute.

But while Galili is a banker who'd get roughly the same at any bank wanting his services, and whose salary was set according to supply and demand for top-level bankers - Ra'anan Cohen is a professional politician. He has zero knowledge of banking or business. He got the job from Industry and Trade minister Dalia Itzik as a political appointment by the Labor Party.

Only another job, intense public protest or a complaint to the High Court are likely to force Cohen to forgo the chute.

Last week an international research company announced that Israel ranks 18th in the list of corrupt countries, in which 1st is the least corrupt - far below Scandinavia or Australia, but a hair above France.

The manner of Ra'anan Cohen's appointment to chair Israel's seventh-biggest bank, his employment agreement, and his golden parachute attest that the researchers simply don't understand how things are done in Israel, and that over here, corruption starts at the top.