The Tel Aviv District Court today cleared the defendants in the Iscar case. Former Discount Investment Corporation (TASE: DISI) CEO Dov Tadmor, former Discount Investment legal advisor Adv. Shlomo Cohen, and former Discount Investment CFO Josef J. Boock were acquitted.
Judges Dvora Berliner, Zeev Hammer, and Judith Shitzer unanimously accepted the appeal. They ruled that all violations for reports filed before August 1993 were during the prescription period under the statute of limitations.
Berliner and Hammer upheld the appeal by Discount Investment, Tadmor, Cohen, and Boock regarding reports filed after August 19, 1993, and acquitted them of all charges.
The appellants filed eighteen financial reports for Discount Investment for the company’s 1990 financial statements and the first quarter report for 1995, without appending the financial statements of private associated companies (Iscar, Blades Technology, and Tefron Holdings) to copies submitted to the Registrar of Companies and the Tel Aviv Stock Exchange.
The appellants attached these financial statements only to the copy filed with the Israel Securities Authority. The prosecution asserted that the published financial statements therefore had lacked information and were misleading, and that the absence of this information had been liable to mislead a reasonable investor.
Tel Aviv Magistrates Court Judge David Rosen convicted the defendants on all charges. He ruled that each of them was guilty of jointly concealing from the public the financial statements of the three companies, which was sufficient to mislead a reasonable investor. The appeals court, however, ruled that no intent to mislead a reasonable investor had been proven. The appeals court also ruled that the Magistrates Court had erred in its decision, rejecting the opinion of the state and the Magistrates Court that since the filed report had included a misleading item, the report had in effect not been filed until it was corrected.
Published by Globes [online] - www.globes.co.il - on November 1, 2004