Sodastream International chairman and former CEO Daniel Birnbaum has been named as the senior executive of the company being investigated by the Israel Securities Authority on suspicion of committing insider trading violations. The alleged offenses were regarding the home carbonated drinks company's acquisition by PepsiCo Inc. Birnbaum and a woman who used to work at the company were questioned yesterday and brought before the Tel Aviv Magistrates Court to discuss the terms of their release. The woman's name not been released for publication. Questioning continued today.
Birnbaum and his associate are suspected of breach of trust, insider information offenses and impeding legal enquiries. The Israel Securities Authority suspects that the senior Sodastream executive passed on information to the associate who acquired shares in the company prior to PepsiCo's acquisition.
Last December, PepsiCo completed the acquisition of Sodstream for $3.2 billion at $144 per share, an 11% premium on the Nasdaq and TASE share price, prior to the announcement about the acquisition. The shares have since been delisted.
The alleged insider information that was illegally passed on concerned the companies positive financial results published on August 1 2018 for the second quarter of 2018 and the report of August 20 2018 about the acquisition by PepsiCo, which saw the share price rise sharply.
Birnbaum's associate reportedly bought shares worth hundreds of thousands of shekels using this information and made an overall profit of NIS 156,000. The same associate is also suspected of buying shares prior to publication of the 2016 financial results on February 15, 2017. On that occasion the suspect made a profit of NIS 28,000.
Birnbaum served as SodaSteream CEO from 2007, stepping down last year to become chairman after the acquisition by PepsiCo. The suspects must be presumed innocent as they have not yet been convicted of any offenses.
Published by Globes, Israel business news - en.globes.co.il - on September 24, 2019
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