MK Tamar Zandberg (Meretz) today asked the Israel Securities Authority to investigate what she called "suspected use of illegal insider information" in trading in Israel Corporation (TASE: ILCO), the controlling shareholder in Israel Chemicals Ltd. (TASE: ICL).
"Last month," said Zandberg, "a few days before Minister of Finance Yair Lapid announced the cancellation of the sale of Israel Chemicals to a Canadian company, someone made an unusual deal, betting that the share price would fall. This deal was huge, estimated at NIS 500 million. What are the chances that someone simply bet that Israel Chemicals' share price would fall just before the finance minister's announcement? The size of the transaction indicates a level of near-certainty, raising suspicion of illegal use of insider information."
In a letter to Securities Authority chairman Shmuel Hauser, Zandberg said, "I am approaching you, because of suspicion of the use of insider information in trading in Israel Corporation. According to TASE data, there was an unusual increase in short positions in Israel Corp.'s share in the fourth week of April, from 6,345 positions in the week of March 28, to 217,735 short positions, reflecting a value of NIS 500 million.
"The timing of the transaction, just days before the finance minister cancelled the sale of Israel Chemicals to Potash Corporation of Saskatchewan Inc. (NYSE; TSX: POT), as well as its unusual size, indicates a level of near-certainty, raising circumstantial suspicion of a transaction based on the illegal use of insider information. If that is the case, this is an extraordinary and serious use of insider information, which is both illegal and publicly unacceptable. I request an investigation into the transaction and its propriety."
Published by Globes [online], Israel business news - www.globes-online.com - on May 5, 2013
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