The Israel Police have detained for questioning some of the controlling shareholders in Shemen Oil and Gas Resources Ltd. (TASE: SOG) in the investigation into corruption at Ashdod Port Company Ltd., announced the company in a notice to the TASE this afternoon. The TASE suspended trading in the company's shares at 11:24 this morning.
Shemen Oil is controlled by Jackie Ben-Zaken and Avraham Nanikashvili, and is run by CEO Yossi Levy and chairman Michael Bar-Haim. Former IDF chief of staff Lt.-Gen. (res.) Gabi Ashkenazi served as the company's chairman for 18 months until he resigned in October 2013, after the abandonment of the Yam 3 well following the failure of the production tests.
"Some of the controlling shareholders in the company (who are not company officers) were detained for questioning by the police this morning, as part of its investigation into contracts at Ashdod Port, including, to the best of the company's knowledge, the company's contract for services by a third party for the rent of storage and wharf space, and related services for the purpose of drilling the Yam 3 well," said Shemen Oil in its notice. "To the best of the company's knowledge, neither the company nor its officers have been questioned under caution in the abovementioned case."
Shemen Oil's contract with Dana Ltd. is one of the contracts under investigation. Shemen Oil rented port services at preferential terms from Dana, rather than directly from Ashdod Port Company, paying Dana ten times the amount that Dana paid the Ashdod Port Company.
Shemen Oil's share price rose 0.5%, before trading was suspended, to NIS 0.37, giving a market cap of NIS 19.6 million.
Published by Globes [online], Israel business news - www.globes-online.com - on May 27, 2014
© Copyright of Globes Publisher Itonut (1983) Ltd. 2014