Tel Aviv Stock Exchange Extends Trading Halt for Tomer Food Amidst Financial Irregularities

The Tel Aviv Stock Exchange's board of directors has decided to extend the trading suspension of Tomer Food's shares due to ongoing "unclear circumstances" surrounding the company. The exchange's regulations stipulate that if the conditions for resuming trading are not met within 48 months of the initial halt, the company's securities will be delisted without further board discussion. The decision follows an ongoing investigation that has uncovered discrepancies in the inventory management of a subsidiary and alleged intervention by controlling shareholder Doron Kimelov, who serves as chairman and CEO, in setting inventory values.

Tomer Food recently appointed Guy Freeman as its CFO and deputy CEO. The identified inventory discrepancies relate to the cost of items that formed the basis of financial statements published before the company's IPO, differing from the amounts that should have been reflected. These findings necessitate a restatement of those financial reports. Further investigations are also being conducted into revenue recognition and the disclosure of certain related-party transactions, prompted by additional information received by the audit committee.

The probes are being carried out by a legal firm and specialized counsel appointed by the audit committee, including interviews with current and former company officials. The situation escalated following the resignation of the former CFO, Avital Cherni, shortly after her appointment, due to inventory discrepancies she discovered in prior company reports released before its IPO. This led to the trading suspension and the initiation of an immediate internal review. The company has also appointed a committee to examine its financial reports, engaged an independent firm for a specialized inventory review, and enlisted Professor Haim Assaig as a professional advisor to the committee.