The Tel Aviv District Prosecution announced Monday it intends to pursue criminal charges against Israeli tycoon Nochi Dankner and two other suspects implicated in alleged securities fraud.
The charges against Dankner include share pegging, filing false investor prospectuses, failing to issue certain reports and using assets illegally under money-laundering laws. The case revolves around a 2012 IDB Holding share offering in which the company raised 321 million shekels ($91.6 million).
The final decision on an indictment is pending a judicial hearing.
Control of the IDB Group, IDB Holdings' parent company and one of the largest conglomerates in Israel, was wrested from Dankner on Sunday following a lengthy legal battle. It was awarded to Argentine businessman Eduardo Elsztain and his Israeli partner, Moti Ben-Moshe.
Another suspect in the case is stockbroker Adi Sheleg, who allegedly preformed the share pegging on Dankner's behalf. Legal experts close to the case said it appears that Sheleg has been able to reach a deal with the prosecution and will testify against Dankner to avoid prosecution.
Attorney Eli Zohar, who represents the embattled tycoon, said, "We absolutely deny all of the prosecution's claims and we believe that the hearing will prove there are no grounds for an indictment ... The timing of the prosecution's decision to file an indictment is perplexing. The question here is whether or not there was intent to defraud [investors], and I believe we have evidence to support the fact that any action taken in this case was in good faith and perfectly legal."
Sheleg's attorney, Gil Dachoach, said on Monday, "Adi Sheleg's case has been separated from that of the other individuals involved in the case. Beyond that we cannot comment on any media speculation."
A statement by attorneys Navit Negev and Iris Niv Sabag, of the Sheinman-Negev-Niv law firm, representing the third suspect in the case, Itay Strum, said: "Strum acted lawfully and committed no crime. He believed in the company and in the success of the offering.
"The issue of share pegging requires proof of criminal intent. This is a complex matter, which requires delving into the circumstances of the case. As we have seen before, the offenses detailed in a hearing subpoena do not necessarily reflect the correct perspective on the case."
The statement said that Strum's defense team "plans to present the full picture to authorities during the hearing."
The investigation into Dankner's alleged wrongdoings is headed by the Financial Crimes Unit in the Tel Aviv District Prosecution.
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