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Tuesday, November 27, 2012

Nochi Dankner under fraud investigation

Nochi Dankner (L)

IDB Holding Corp. Ltd. (TASE:IDBH) today notified the TASE that chairman Nochi Dankner was questioned yesterday on suspicion of securities fraud and other offenses related to an issue of shares and warrants by the company on February 23, 2012. He was released with conditions.

Dankner said, "An investigation is underway by the Israel Securities Authority. I respect the investigation process, and I have full confidence in the Securities Authority. I am convinced that my actions on this matter will be quickly cleared up. They were and have always been legal and carried out honestly and impeccably."

Dankner has been banned from leaving Israel, his passport has been sequestered, he may not contact anyone involved in the case, and his has deposited a NIS 5 million guarantee.

The Securities Authority also questioned a Dankner associate, whose name may not be disclosed, a securities trader, Yehuda Sheleg. In the motion to release the three men with restrictions, the Securities Authority said, "The investigation related to the suspected involvement by Dankner, Sheleg, and a third party in securities fraud, reporting violations, aggravated fraud, fraud, breach of trust, and suspicion of violating the Prohibition on Money Laundering Law (5760-2000). The case involves their activity in trading in IDB Holding's shares during February 2012, during an issue of additional shares by the company to raise capital from the public."

The Securities Authority says that Sheleg and Dankner's associate "action with other parties in a fraudulent way intended to influence the share price of IDB in order to improve the issue's chances of success by carrying out fraudulent transactions amounting to tens of millions of shekels on February 21-23. These fraudulent actions are suspected of being carried out with Dankner's knowledge, at his instructions, and with his financing."

The Securities Authority alleges that Dankner "financed the fraud plan personally and by recruiting outside parties who, at his instructions, bought shares which had been bought by Sheleg and another individual during the fraudulent activity in order to continue financing it."

The Securities Authority states, "The investigation found that Dankner initiated the fraud described above, was one of the main beneficiaries, and even took care to finance a substantial part of it. Moreover, the investigation found that, shortly after the offering was closed, Dankner transferred NIS 8 million to the other individual's bank account."

On February 23, 2012, IDB Holding's raised NIS 321 million in an issue of shares and warrants, as part of the company's effort to improve its liquidity. The offering was oversubscribed. Many well-known market players participated in the issue, including Michael Strauss, Shlomo Eliahu, Yair Hamburger, Meir Shamir, and Shaul Shani.

IDB Holding's share price fell 60% after the offering to it low point in June, before partly recovering.

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