Administrative petition (Tel Aviv) 35188-06-23 Chairman of the Israel Securities Authority v. Dakma Capital Ltd.

I have before me a petition of the Israel Securities Authority against the decision of the Administrative Enforcement Committee in the administrative case 2/22 Chairman of the Israel Securities Authority v.  Dakma Capital Ltd.

background

1. Respondent 1, Dakma Capital Limited Ltd. (hereinafter: Dakma Capital or Company), is a reporting company whose shares are traded on the stock exchange since December 2009, and until 2018 operated in the field of investment real estate.  Respondent 2, Mr.  Netanel Lorenzi (hereinafter: Lorenzi or Respondent), became an interested party in the company in 2018 and began serving as its general manager through Dekma Ltd., a wholly-owned private company (hereinafter: Dekma).  Dekma has been engaged in financial consulting and the provision of loans to various entities and has held a license to provide credit according to The Supervision of Financial Services (Regulated Financial Services) Law, 5776-2016 (Hereinafter: The Supervision Law).  Initially, Dakma held about 25% of the company's shares, and in November 2018, its holdings increased to 48.61%.  As of December 2019, Lorenzi directly held 57% of the company's share capital.

A statement of administrative claims was filed against the company and Lorenzi (hereinafter: the Respondents) centering on a loan given by Dekma Capital, through Dekma, to a borrower who is a third party.  In the administrative statement of claims, it was claimed that the respondents breached their obligation to report the breach of the loan agreement.  In summary, it should be said that the breach that is the subject of this petition is the non-payment of interest on a loan given to the borrower and the non-payment of another small loan that was given to him (which was defined as an addendum to the loan agreement).  For this reason, the respondents were attributed a breach of the duty to report under Item 2 of Part C of the Seventh Addendum to the Securities Law, 5728-1968 (hereinafter: the Securities Law).  It was also claimed in the administrative statement of claims that when the company's reports were published, they included misleading details that were also repeated in the company's financial report for 2018.  As a result of these claims, two additional violations were attributed to the respondents.