Israel's Dankner faces possible indictment over IDB securities

JERUSALEM Mon Jan 6, 2014 11:05am EST

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JERUSALEM Jan 6 (Reuters) - Tel Aviv's district attorney is to decide whether to indict Israeli businessman Nochi Dankner on charges of securities fraud, the Justice Ministry said on Monday.

Dankner, who just lost control of conglomerate IDB Holding in a takeover battle, faces the accusations over dealings in early 2012. The securities regulator has already recommended indictment.

A hearing would be held before a decision was taken on whether to indict Dankner and IDB, the Justice Ministry said in a statement. It did not say when the hearing would be held or who would take part.

"We believe that following the hearing, it will be decided that there will be no indictment," said Eli Zohar, Dankner's attorney. "We categorically deny the prosecutor's arguments."

IDB is one of Israel's largest holding companies and its various units hold stakes in Cellcom, Israel's largest mobile phone operator, Super-Sol, the country's biggest supermarket chain, and real estate developer Property & Building .

In February 2012, IDB sold 321 million Israeli shekels ($2 million) of shares and warrants, including 62 million shekels worth to controlling and major shareholders.

Dankner and securities traders are accused by the Israel Securities Authority of trying to artificially inflate IDB's share price to improve chances of the offering's success. The regulator had recommended indictment on securities and corporate fraud and breach of trust.

Dankner lost control of IDB when Argentinian businessman Eduardo Elsztain and his Israeli partner Moti Ben-Moshe group won support from 75 percent of bondholders and bank creditors for a take-over as part of a debt restructuring.

($1 = 3.5071 Israeli shekels) (Reporting by Steven Scheer; Editing by Matthew Tostevin)

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