Court orders seizure of Heftsiba founder's assets - Haaretz

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Thu., August 16, 2007 Elul 2, 5767

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Last update - 20:48 16/08/2007

Court orders seizure of Heftsiba founder's assets

By Eti Aflalo, Haaretz Correspondent

Jerusalem District Court on Thursday issued a temporary order for the seizure of all assets belonging to Heftsiba founder Mordechai Yona, thereby accepting real estate developer Solel Boneh's claim that Yona had personally signed as Heftsiba's guarantor to a value of 12 millon shekels.

The seizure is valued at NIS 12.5 millions shekels.

The Judge accepted Solel Boneh's testimony, and added that a private investigator hired by Solel Boneh found that Yona's numerous real estate holdings are either not listed in his name or are listed in ways that raise concern.

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Tel Aviv Magistrate's Court on Wednesday placed Yona under house arrest for a period of 15 days, after the recent sudden collapse of the real estate development firm left thousands of would-be homeowners, bondholders and financers empty-handed.

The court also demanded he post a bond of NIS 1 million and deposit a bank guarantee of NIS 750,000.

Yona was questioned Wednesday by the police's National Fraud Unit, the Israel Securities Exchange and the Tax Authority, following a raid and search of his home. Public outcry has prompted intense investigation of the business and its shareholders.

Yona is suspected of Securities Law violations, fraud and money laundering. The police also sought a remand of his son, Boaz Yona, whose whereabouts are unknown.

After the business made the headlines, Mordechai Yona claimed he was unaware of any fraud in the Heftsiba group committed by is son. Nevertheless, as investigation of the affair commenced, other people countered his claim.

According to Mordechai Netanel, Heftsiba Jerusalem's CFO, who was questioned by the Securities Authority, Yona was aware of allegations that his son had committed financial offenses. The son purportedly withdrew NIS 70 million from the company's coffers.

Nor Netanel is alone in claiming that Mordechai Yona was involved in Heftsiba's operations and knew of his son's activities. Boaz Yona's former partner, Nissim Cegron, filed a claim against Mordechai Yona, Heftsiba and a number of companies in the Heftsiba group early this week, in which the court was asked to hold the company's shareholders, Mordechai and Heftsiba, personally responsible for the debts of the companies.

Mordechai Yona, born in 1939, founded the Heftsiba group in 1968, naming it after his wife. The company's stellar growth followed the momentum in the construction sector after the Six-Day War and the unification of Jerusalem. Yona served as the president of the Association of Contractors and Builders in the early 1990s.

In a letter Yona wrote, and will apparently be sent to the Knesset Finance Committee, he asserts that he has nothing to hide, and promised to provide any information at his disposal to anyone who seeks and is entitled to it. Yona does not refer to the action of his son in the letter, but claims that the damage caused to apartment buyers, contractors and suppliers can be best minimized by allowing him to implement a recovery plan, for which he requires access to material within the company. Yona has been barred from the firm's offices.

Yona wrote: "I hope and believe that after 55 years of operation, 40 though Heftsiba, I will be allowed the opportunity to save my life's work and complete the construction of thousands of apartments in which the purchasers expect, and rightfully so, to live."

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