IDB Holding Corp. chairman and controlling shareholder Nochi Dankner is under
investigation over suspected securities fraud and other offenses, the company
reported to the Tel Aviv Stock Exchange Tuesday.
According to the
statement, the Israel Securities Authority questioned Dankner on Monday in
relation to IDB’s issue of shares and warrants on February 23. The ISA released
him on condition that he remain in the country, refrain from contacting anyone
involved in the case, and deposit a NIS 5 million guarantee.
the investigation process, and I have full confidence in the authority,” Dankner
said. “I am convinced that my actions on this matter will be quickly cleared up.
They were and have always been lawful and conducted honestly and
Shares in IDB Holding nosedived immediately after the 10:47
a.m. announcement, falling 5.12 percent to NIS 15.20 at close of
The ISA questioned two other people on Tuesday: a Dankner
associate, whose name cannot be disclosed, and securities trader Yehuda
In its court request to have the three men released with
restrictions, the authority said that its investigation related to their
suspected involvement in securities fraud, reporting violations, aggravated
fraud, breach of trust and money laundering.
It alleged that Sheleg,
Dankner’s associate and other parties had made fraudulent transactions worth
tens of millions of shekels on February 21-23, with the aim of influencing IDB’s share price and improving the issue’s chance of
Dankner “financed the fraudulent plan personally by recruiting
outside parties who, at his instructions, purchased shares which had been bought
by Sheleg and another associate during the fraudulent activity in order to
continue its financing,” the ISA stated.
“The investigation found that
Dankner initiated the fraud described above, was one of its main beneficiaries,
and even took care to finance a substantial part of it,” it continued.
“Moreover, the investigation found that, shortly after the offering was closed,
Dankner transferred NIS 8 million to the associate’s bank
Explaining the need to impose conditions on the trio’s release,
the authority said it would need more time to question them and other
individuals suspected of involvement. It added that given the “gravity of the
offenses,” there was serious concern that the suspects would disrupt proceedings
by coordinating their stories, pressuring potential witnesses and destroying
“In addition,” it concluded, “given the gravity of the
suspected violations and the magnitude of the aforementioned activities, there
exists a real fear that [one or more suspects] will attempt to escape justice.”