Investors claim: In a 2013 Ashkenazi affair and Levi's CEO, they misunderstood and violated due diligence while knowing about the dismal state of "Sea 3" drilling.

• Gabi Ashkenazi

  Photo: 

  Gideon Markovich

Israel Today learned that Tel Aviv District Court yesterday filed a motion to summon MK Gabi Ashkenazi for testimony in a class action lawsuit against an oil company and its senior executives.

MK Ashkenazi served as chairman of the company's board of directors. As we announced last February, the amount of the claim that the court is required to approve is about NIS 90 million. The case was scheduled to be held this week, but the Corona crisis was postponed to October.

These are events that occurred in 2013, when it performed oil drilling for the purpose of finding oil near the Ashdod coast. Drilling failed, former CEO Yossi Levy and Ashkenazi resigned, and the company's value plunged from almost half a billion to zero. According to the plaintiffs - investors in the company's stock, as well as purchasers of its private offering - Ashkenazi and Shane mislead investors into thinking there was a high chance of finding oil, In January, another class action lawsuit was reached, in which oil investors would distribute NIS 4.5 million.

More on:

• Gabi Ashkenazi's new legal trouble

• On the way to the court: Application to approve class action lawsuit against "oil" headed by Gabi Ashkenazi

• Gabi Ashkenazi resigned from the Board of Directors

"The essence of the request for approval in this case is an explicit deception, a deliberate disclosure of the true state of the Drilling Sea 3 and in concealing material data from the public," the plaintiffs' request, represented by Attorney Yitzhak Aviram and Shachar Ben Meir, said. And the drilling proclamation as "dry drilling" caused investors "heavy damages, which are reflected in a very significant drop in the share value, to a 92% collapse."

The request also states that "Ashkenazi's investigation presented clear statements at meetings of the board of directors that preceded the company's reports and which (to say the least) did not match what it reported to the investor public." They also say that Ashkenazi "had a substantial involvement in a substantial part of the board's discussions, where it was decided to issue misleading and misleading reports to the public shareholders in the company." 

"Impeccable in conduct"

Prosecutors point out that Ashkenazi is not an oil exploration expert, and that he was appointed chairman of the company only by his former chief of staff status: "For the sake of creating the image and image of a serious company, the company boasted its chairman (Mr. Ashkenazi) ... but when The company and Ashkenazi itself are being sued here as part of the request for approval, all of a sudden there is no flair and nothing, but "embarrassed" (and embarrassing) modesty of Ashkenazi and the respondents, who try to hide his presence and prevent giving testimony on his behalf, as if he was a marginal person and unaware of the company's actions " . 

On the other hand, they argued that the Securities and Exchange Commission backed Oil, stating that it had failed in its conduct, but that the Authority's position did not prevent the court from approving another class action lawsuit against the company in October 2016. 

"There is evidence infrastructure"

At the time, Judge Danya Karth-Meir stated that "there is a sufficient initial evidentiary infrastructure that Ashkenazi, Levy and the company violated the disclosure obligation" applied to them by the Securities Law and that the relevant public did not have all the relevant information required to make an informed investment decision. Last January, in another class action suit, a settlement agreement was reached whereby oil investors would distribute NIS 4.5 million. MK Ashkenazi and the oil company chose not to respond to Israel Today