Text size

The largest investment house on the Tel Aviv exchange, Excellence Nessuah, apparently is finding it difficult to meet its obligations with its legally troubled affiliate, Opmat Investments.

When Excellence Investments, which just recently entered the vaunted TA-100 index, asked the exchange to approve its acquisition of Nessuah Zannex Securities, which had a seat on the exchange more than two years ago, it received conditional approval. The condition, according to Excellence's July 2003 press release, was that the company and its controling owners make "a commitment that if indictments be filed against Opmat, and/or its workers, and/or Opmat's shareholders, Excellence and its interested parties will cut off any business contact with Opmat, with the shareholders, and with the workers in Opmat against whom the indictments are served."

Indeed, charges were filed against Opmat managers Ronen Reshef and Golan Cohen, who hold half the company, over three months ago, in the Partner affair. However, Excellence Nessuah, which founded Opmat in 1993 and holds the other half of the company, has not followed through on its commitment.

According to the Excellence 2004 financial report, Opmat had equity of NIS 25 million. Q2 2005 reports also make no mention of liquidating Opmat operations.

So what is keeping Roni Biram and Gil Deutsch, two of the country's most successful private brokers in recent history, from fulfilling their commitments? It seems that behind closed doors, a fight has broken out between the two Excellence Nessuah leaders, who want to buy Ofmat shares from Reshef and Cohen, and the Opmat managers, who have refused to sell, or are unwilling to accept the low offer. Reshef and Cohen, however, hold the power, since while they are accused of serious misdeeds, their refusal to sell may drag Biram and Deutsch into serious trouble.

Excellence said it plans to stand by its word and is dealing with the matter. "Excellence will eliminate its holding in Opmat" within a few months, officials said. The exchange commented that it "is acting to implement the board decision."

The Partner affair broke on the last day of trade in July, 2001, when minutes before the close of the exchange, Partner Communications shares skyrocketed 49 percent. The event occured just two days before Partner was to join the Maof-25, and it was explained that an options trader was trying to manipulate the share price to profit from options trading.

Reshef and Cohen, meanwhile, were arrested by Israel Securities Authority investigators in early 2002. However, it took three years for indictments to be filed, which charge them with share price manipulation.