Givot Olam Files Complaint With ISA Over 'Unfounded' Bad Press

Givot Olam Oil filed a complaint with the Israel Securities Authority yesterday objecting to press reports it said reflected an attempt to lower the company's share price.

Trading in Givot Olam shares was suspended early yesterday after the complaint was filed. Trading resumed later in the morning. Shares closed down 2.13% for the day yesterday after plummeting 25% on Sunday, but rising 2.2% Monday.

Press reports in the past week said the oil exploration company was at risk of losing its permit to drill at the Meged 5 site near Rosh Ha'ayin. The National Infrastructure Ministry confirmed yesterday that Givot Olam's permit could be revoked if the well is not shown to be commercially viable, but indicated that this wasn't exactly breaking news, since the company had been advised of the matter three years ago.

"The National Infrastructure Ministry letter is a standard letter and nothing more," said a Givot Olam spokesman. "It was sent three years ago and there is nothing new in it and no threat to the license at this stage."

Chaim Indig, a lawyer for the company, said attempting to influence share price constitutes a violation of securities laws.

"From a conversation that took place [yesterday] with the official in charge of oil policy at the National Infrastructure Ministry, Yaakov Mimran, it turns out the report is unfounded," said Indig. "My client is seeking to have the Securities Authority open a criminal investigation as soon as possible against those who were responsible for this false report and for the violation of the law inherent in it."

Givot Olam has said it received ministry assurance that there have been no new developments regarding the status of its Meged 5 license.

"Our general partner is convinced that production from the Meged 5 well, even if it is of a magnitude reflecting the test production carried out at the Meged 5 drilling site, is sufficient to meet what is required from a commercial well by the oil law," the company said.

The ministry has said that to be commercially viable according to the law, the oil the well produces has to be worth more than the ongoing investment in producing it. The oil exploration partnership was given a 30-year license at the Meged 5 site seven years ago, but the site has yet to produce commercial quantities of oil.

Last week, MK Carmel Shama (Likud ) demanded that the Knesset Finance Committee meet to discuss the Givot Olam case and that officials from the Infrastructure Ministry and the Securities Authority be called to testify. He said the case showed that the flow of information could be manipulated to lead the public to make decisions based on what he called false reports.

"If someone at the National Infrastructure Ministry was negligent, Givot Olam's investors don't need to pay the price," he said, adding that an estimated NIS 1 billion has been invested in the partnership on the basis of the license granted by the ministry.

But despite statements indicating an interest in protecting investors, Shama also said he received e-mail threats from Givot Olam investors after he called for the Finance Committee hearings.