If business magnate Nochi Dankner thought that nothing could get any worse after
losing control of IDB on Sunday, the prosecution’s announcement Monday that it
would likely indict him for securities fraud relating to hundreds of millions of
shekels may have been a rude awakening.
The Tel Aviv Economic Crimes
department said that it would likely file an indictment, but would first offer
Dankner a special pre-indictment hearing where he could try to convince it to
close the case.
Such hearings very rarely prevent an indictment. But in
2012, such a pre-indictment hearing allowed Foreign Minister Avigdor Liberman to
successfully convince Attorney- General Yehuda Weinstein not to indict him in a
large, multi-million dollar money-laundering case.
Instead, he was
indicted in the much smaller Belarus Ambassador Affair, for which he was
The prosecution’s statement read that Tel Aviv District
Attorney Liat Ben-Ari (who also leads the Holyland trial prosecution) made the
decision in coordination with the deputy state attorneys for criminal and
If the case goes forward, Dankner will be indicted for
securities fraud, misrepresentations to shareholders and investors, failure to
issue certain reports and illegal use of assets under money-laundering
The indictment would address alleged crimes committed in February
2012 regarding an over NIS 300 million fraud in conjunction with the issuing of
shares by IDB.
According to media reports, Dankner, broker Itai Strom and
other allies coordinated an artificial scheme in which they manipulated IDB
stocks prior to a major issuing of shares and took other actions in a manner
that artificially inflated the price of the shares and the success of the
There was rampant media speculation about Adi Sheleg, who has
also been suspected of involvement in the securities fraud
Speculation focused on the absence of Sheleg from the list of
potential defendants, with many saying that Sheleg may have cut a deal for
preferential treatment or immunity in exchange for turning state’s witness
against Dankner and other defendants.
The Justice Ministry would not
officially confirm or deny Sheleg’s status.
In November 2012, Dankner was
questioned under suspicion of having committed securities fraud. He was released
from police custody only after depositing a NIS 5m. check for bail and after the
court issued an order banning him from leaving the country, having viewed him as
a potential flight risk.
The prosecution’s statement said that the
prosecution was also weighing indicting Strom and IDB itself for securities
fraud and other overlapping crimes with Dankner.
Attorney Eli Zohar,
representing Dankner, responded, “We completely deny all of the claims by the
prosecution, which were mentioned in their statement today, and we believe that
following the hearing, it will be decided that there is no basis to move forward
with a trial.”
Zohar added that the timing of the prosecution’s statement
“was astonishing,” it being the day after control of IDB was permanently wrested
from Dankner in favor of Eduardo Elsztain and Moti Ben-Moshe.