State Comptroller Micha Lindenstrauss has launched an investigation into debt settlements and supervision of credit granted to large leveraged companies. The Office of the State Comptroller began collecting evidence and documents at regulators responsible for supervising the capital market and banks: Ministry of Finance's Capital Markets, Insurance and Savings Supervision Division, the Bank of Israel's Banking Supervision Department, and the Israel Securities Authority.
The Office of the State Comptroller said, "We are investigating the issue, because it involves the public's savings in pensions and training funds."
Lindenstrauss said that his office was investigating the regulators' oversight of capital raised from the public through bond issues. The Office of the State Comptroller launched the investigation in the wake of the increase in financially troubled companies that have asked for debt settlements from their bondholders, which include investment institutions.
The latest tycoons asking for debt settlements include Yitzhak Tshuva for Delek Real Estate Ltd. (TASE: DLKR), Ilan Ben Dov for Tao Tsuot Ltd. (TASE: TAO-M), and Yosef Maiman for Ampal-American Israel Corporation (Nasdaq: AMPL; TASE:AMPL).
The State Comptroller said that the investigation would examine how these debt settlements, which may result in the companies repaying only a fraction of their debts to bondholders - a haircut - are liable to affect the public, whose pensions are invested by investment institutions in these companies.
Published by Globes [online], Israel business news - www.globes-online.com - on December 27, 2011
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