Melisron, Ofer Execs to Be Indicted for Securities Fraud

The State Prosecutor's Office has notified several members of the Ofer Brothers Group - real estate firm Melisron, Ofer Investments and Ofer Development and Investments, along with several of their senior executives - that it intends to indict them for securities fraud, subject to a hearing.

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The charges involve an alleged attempt to raise the price of Melisron bonds in November 2009 as well as improper reporting.

Melisron, which is chaired by Liora Ofer, its subsidiaries, rents out commercial and office space it owns. Its best-known assets include the Kiryon Mall north of Haifa, the Ramat Aviv Mall, the Renanim Mall in Ra'anana and a number of other large shopping centers.

The executives named in the draft indictments are Avi Levy, the CEO of Ofer Investment and acting CEO of Melisron at the time; Golan Madar, who was the CFO of Ofer Investments and its subsidiaries; and Eli Haelyon, who worked as a trader at Poalim Sahar, where he made the deals on behalf of Melisron.

Ofer Investments is the controlling shareholder in Mizrahi-Tefahot Bank, but sources involved in the case told TheMarker there was nothing to legally prevent the company from maintaining control of the bank, since the executives involved do not serve on Mizrahi-Tefahot's board.

In addition, the sources said, Levy and Madar can continue holding their positions at Ofer Investments, and the company is not required to remove them. Only after the the defendants receive all the investigative material from the prosecution will a decision be made about whether to remove or suspend them.

Melisron shares are traded on the Tel Aviv Stock Exchange, and the company has issued three series of bonds, which are also traded on the exchange.

Its stock fell 3.8% yesterday on the TASE.

In November 2009, the firm notified the public that it was considering issuing more bonds and expanding its B4 series.

According to the prosecution, in the last week of November, Melisron caused the price of its existing bonds on the TASE to go up artificially in the hope of receiving a better price on the new bonds it was offering in the public tender.

Levy and Madar are accused of providing Haelyon with large sums of money for the purpose of manipulating Melisron bond prices, via the accounts of Ofer Development.

All told, out of the NIS 34 million in Melisron bonds that traded hands in the period before the tender, NIS 23.9 million originated in the alleged manipulation.

Pinhas Rubin, the lawyer representing the suspects, said they have yet to see the investigative material, due to be handed over within the next 30 days. Rubin said that it does not seem that his clients violated any laws.