Israeli Minister Again Questioned on Insider Trading

'I’m sure this cloud will dissipate and I won’t be left with any stains,' says Social Affairs Minister Haim Katz.

Social Affairs Minister Haim Katz.
Emil Salman

Social Affairs Minister Haim Katz has been questioned for a second time by the Israel Securities Authority on suspicion of insider trading based on information he received by virtue of his position.

The second round of questioning, which took place several weeks ago, involved additional suspicions of bribery and corruption.

Katz said on Tuesday that he was certain he would be cleared of the suspicions.

Katz was initially questioned in May 2016 in connection with suspicions that he had purchased shares of Nitsba in July 2015, after learning that Airport City was about to issue a takeover bid. He allegedly received the information from Mordechai Ben-Aryeh, who had been a financial adviser to both real estate companies.

Both Katz and Ben-Aryeh are alleged to have bought shares in Nitsba just before the merger was announced. ISA investigators believe the two made an illicit profit of 290,000 shekels as a result. Other individuals have also been questioned.

Nitsba announced the buyout to the stock exchange on July 5, 2015. Under the deal, Airport City would take Nitsba private by buying the public’s holdings in the company, paying a 23% premium over the market price at the time. The announcement sent Nitsba’s share price up 17.5%.

The investigation found that Ben-Aryeh had access to insider information and allegedly bought the shares before the announcement, which he was forbidden to do. Ben-Aryeh allegedly also informed Katz, who also allegedly made illicit use of the insider information.

Katz took office as social affairs minister on May 14, 2015. Ministers are forbidden from holding stocks valued at 200,000 shekels or more, and are required to transfer their shares to a public blind trust within 60 days of taking office.

“I’m sure this cloud will dissipate and I won’t be left with any stains,” Katz said in response on Tuesday. “I’ve said everything I had to say in full cooperation with the investigators and I haven’t needed to hire an attorney.”