Israeli Public Companies Face Financial Irregularities Amid Transition to Public Markets
Recent events in the Tel Aviv stock market have highlighted financial irregularities not only in foreign companies but also in Israeli firms that recently went public. Two Israeli companies, Best and Tomer Food, have come under scrutiny for suspected financial misconduct during their transition from private to public status, emphasizing the need for stricter oversight during this phase.
Best, a construction company controlled by the Tanous brothers, disclosed a financial review after concerns arose about unauthorized transfers of up to one million shekels from its subsidiary's funds between October 2024 and June 2026. Additionally, about 2.2 million shekels were allegedly transferred improperly to third parties unrelated to the owners. Upon discovery, the controlling shareholders promptly returned 1.1 million shekels with interest. Best completed its initial public offering in June at a valuation of approximately 2.9 billion shekels. The stock price fell modestly by about 7% since the IPO.
In a related case, Tomer Food, which joined the Tel Aviv Stock Exchange three months ago through a merger, faced a sudden resignation of its newly appointed CFO, Avital Perlstein Cherni, due to concerns over inventory management in previous years. This prompted an immediate internal investigation into how inventory was handled and its impact on the company’s 2026 financial statements. Trading in Tomer Food shares, valued at around 138 million shekels, was halted following the announcement. The company is controlled by businessman Doron Kimelov.
These incidents follow earlier scandals involving foreign companies listed in Tel Aviv that misappropriated investor funds, underscoring risks associated with bond issuances by entities incorporated in the British Virgin Islands. The cases of Best and Tomer Food demonstrate that financial irregularities can also occur within Israeli companies, particularly during their critical transition to public markets, highlighting the importance of enhanced regulatory scrutiny and governance standards.
Summary: Two Israeli companies, Best and Tomer Food, recently listed on the Tel Aviv Stock Exchange, revealed financial irregularities during their transition to public status, leading to investigations, a CFO resignation, and trading suspension, underscoring the need for stronger oversight of newly public firms.
