Menora Mivtachim Shares Plunge 5% After Police Freeze Company Accounts Amid Bribery Probe

The Tel Aviv Stock Exchange opened sharply lower on Tuesday, led by a nearly 5% drop in Menora Mivtachim's shares following a dramatic police investigation development. The insurance giant's plunge dragged down the TA Insurance Index by about 1.7%, while the broader TA-35 and TA-125 indices fell approximately 0.9% and 0.8%, respectively. The tech sector also suffered heavy losses, with chipmakers Nova, Tower, and Camtek each declining around 6%, triggered by Samsung's preliminary earnings report raising concerns over a potential slowdown in the chip and AI markets.

The steep decline in Menora's stock came after the Lahav 433 police unit executed an aggressive financial seizure, freezing roughly 183 million shekels across the group and its senior executives' accounts. Approximately 93 million shekels were frozen in the parent company Menora Holdings and subsidiary Menora Insurance accounts, while another 90 million shekels were frozen in personal accounts of several top managers. A source involved in the investigation stated, "Very strong evidence has been collected against all involved in the bribery offense."

The implicated executives are expected to face extended interrogations at Lahav 433 offices in the coming week. This dramatic development is part of a broad investigation dubbed "Hand Pressing Hand," ongoing since 2023, which has already spawned over 18 sub-cases. Central figures include Histadrut Chairman Arnon Bar-David and insurance agent Ezra Gabay.

The probe focuses on the "Bri'im Beyachad" health insurance policy, covering medications outside the national health basket. Police suspect Menora's management paid bribes and benefits to Gabay, who acted as a broker to influence Bar-David to enroll over 300,000 union members in the policy. Evidence suggests Bar-David promoted the policy despite internal opposition citing unfavorable terms for members. The scheme generated tens of thousands of shekels in revenue for Menora over eight years (2018 to recently), with Gabay receiving unusually high commissions between 8% and 11% of the payments made by the Histadrut, despite not providing actual services.

This unfolding scandal has sent shockwaves through Israel's financial and insurance sectors, with further legal and market repercussions expected as the investigation continues.