1. Application to certify a derivative claim on behalf of respondent 1 (hereinafter: "The Football Association" or "The Association") against respondents 2-4 (hereinafter also: "Respondents"). The Applicants claim that the Respondents caused damages to the Football Association in the amount of NIS 38.5 million (as indicated by theAlkalai Reportas defined below), or at least at a rate of approximately NIS 26 million (as follows fromSol Reportas defined below).

Factual Background

The excess transfers and the incorrect recording in the Association's financial statements

2. Applicant 1, Adv. Moran Meiri (hereinafter also: "Adv. Meiri") and Applicant 2, CPA Adv. Lior Shechter, are members of the Football Association's management.

The Association is a non-profit organization registered under  the Associations Law, 5740-1980 (hereinafter: the "Associations Law"), and operates as a non-profit institution. The members of the association are the senior teams in the football industry. The association operates according to the basic regulations that are its constitution, and one of its main goals is the development, centralization and management of the football industry in Israel.

The Association operates in cooperation with the Football Leagues Administration (hereinafter: the "Leagues Administration") – a private non-profit company, which since 2014 has been managing the professional and economic activities of the professional football leagues (the Premier League and the National League).

3. The issue of the application for approval is rooted in prohibited transfers of funds (hereinafter also referred to: "Prohibited Transfers") from the Association and its member teams, which originate from the funds received by the Association from the Council for the Regulation of Gambling in Sports (hereinafter: "The Toto") and from the sale of broadcasting rights, in accordance with the agreements made between the Association and the parties. These funds were intended in part to finance the football teams that are members of the Association, and in part to finance the operation of the Association. However, the sums that the association actually transferred to the teams far exceeded the sums that the teams were supposed to receive. Among these sums are "hypocrisy" amounts, whose excess transfers can be attributed to specific groups, and "unpainted" funds, to whom it is impossible to identify to whom they were distributed.

The Discovery

4. In the Association's financial statements for the years 2008/2009-2012/2013, the surplus of transfers to teams was presented as an "asset" of the Association, i.e., as revenues that will be received from Toto and broadcasters. This is despite the fact that these funds did not meet the accepted accounting standards for recognizing them as an "asset".

On June 27, 2014, a meeting was held between Respondent No. 4, CPA Shimon Greenberg (hereinafter: "CPA Greenberg") and an accountant from the Professional Department of ERNST & YOUNG, and Respondent No. 2, Mr. Avi Luzon (hereinafter: "Mr. Luzon") and Respondent No. 3, Mr. Meir Lieber (hereinafter: "Mr. Lieber"). At this meeting, the accountants argued to respondents 2-3 that it was not possible to continue recording the reports in the aforementioned manner.