A.The state's control of Agrexco was also reflected in the decision and execution of the bond issue. The company did not do anything without obtaining the consent of the state.The issuance of the bonds was done with the consent and approval of the state.According to the minutes of the meeting of the company's board of directors on December 13, 2007, Yaakov Tzur, the chairman of the board of directors at the time, in presenting the issue of the bonds, said:
"All the material was forwarded to Ze'ev Lichtenfeld, the referee of the Government Companies Authority, he spoke to me today and said that he inquired with Meir Shemara, Deputy Director General of the Companies Authority and the Authority's legal advisor, and they have no objection."
B.In addition, as stated above, Yaakov Tzur reported: "Shlomo (Mr. Shlomo Tirosh, CEO of the company.10.b) also spoke with the Minister of Agriculture and updated him." We are witnessing direct communication and the delivery of updates, between the company's CEO and the Minister of Agriculture, personally.
III.It should be noted that at the same meeting of the company's board of directors, Shlomo Tirosh, the company's CEO, admitted that: "In all four banks, mainly in Discount and Agrexco International, Agrexco is unable to raise long-term credit..." This information was not presented to the investors, who may not have entered into the bond investment, had they been aware of it.
The minutes of the company's board of directors meeting , dated December 13 , 2007, are attached in Appendix 9 to this opinion.
IV.In addition, the state's control of Agrexco was also expressed in the bond trust deed, in which a cause was set for making the unliquidated balance of the bonds available for immediate repayment, in the event that "the state's holdings in the company's management shares have fallen below 50% and the new controlling shareholder is rated lower..." (Section 1) 7 to the trust deed).
V.The state's control of Agrexco was also an important element in the rating given by the rating company to the bonds on the eve of their issuance (an A2 rating reflecting low credit risk), on the basis of which the bondholders purchased the bonds, at the interest rate specified in the terms of the issue.