Minister Haim Katz, Mordechai Ben-Arye and Kobi Maimon have had business ties for many years, much of it centered on the energy company Isramco, and Katz himself had an earlier brush with the Israel Securities Authority on insider trading charges before the latest probe surfaced this week.
Katz has a big stake in Isramco, which is a partner in the Tamar natural gas field and controlled by Maimon. Katz is believed to be worth millions of shekels, although in the past he has declined to reveal exactly how much.
Last May he denied a report in the financial daily Calcalist that his holdings were worth 50 million shekels ($13 million) “I only wish I had 20% of the amount published in that Calcalist article. I would say even more, If only I had even 15%,” he said.
In 2009, the ISA said it was opening an investigation into whether Katz had bought Isramco shares using insider information. Katz, then as now a Knesset lawmaker, denied the accusations.
“I bought Isramco shares five years ago. In the past year I haven’t bought any of the company’s shares and certainly not before any gas was discovered,” he said before the ISA dropped the probe in 2011 for lack of evidence.
As an MK, Katz sponsored legislation in 2010 that would have amended the Securities Law to give bondholders preference in getting back their money when a company got into financial difficulties. An investigation by Haaretz at the time showed that Isramco would have been a major beneficiary of the amendment beause in addition to its energy holdings it also owns a big portfolio of bonds.
Katz never revealed his ties to Isramco and Ben-Arye testified as an expert witness in the Knesset in the amendment’s favor. “We’re talking about a law that makes for social justice,” Katz said at the time.
On the other hand, last year Katz refused to join the Knesset vote to transfer then-Economy Minister Arye Dery’s right to override antitrust objections to the natural gas framework accord to the prime minster. Katz cited conflicts of interest due to his Isramco holding.