Israel Securities Authority investigators on Tuesday raided the offices of defense company Aryt Industries and its subsidiary, Reshef Technologies, as part of a probe into suspected insider trading involving senior company officials.
The investigation centers on suspicions that a market participant — the owner and chief executive of an investment house — purchased shares in Aryt after allegedly receiving inside information from company officers, according to people familiar with the matter. At this stage, there is no indication that the company officials directly or indirectly benefited from the alleged leak. The names of the suspects are under a court-ordered gag order.
Investigators searched the offices of Aryt and Reshef Technologies in Or Yehuda and questioned at least two company officers at the authority’s offices in Tel Aviv. Aryt said in a filing that, “to the best of the company’s knowledge at this stage, there are no suspicions against the company itself,” and stressed that the investigation has no impact on its ongoing business activity.
Aryt Industries, which is publicly traded on the Tel Aviv Stock Exchange with a market value of about 6.2 billion shekels ($2 billion), is a holding company that wholly owns Reshef Technologies. Reshef develops, manufactures and markets advanced electronic fuzes and other military electronics used in artillery shells, tank rounds, mortars and loitering munitions. Its products are sold to the IDF and foreign armed forces, including India.
Aryt is controlled by Chairman Zvi Levi, who holds a 39% stake. The company is led by Chief Executive Haim Stapler. Over the past year, Aryt’s shares have surged 308%.
Earlier this year, Aryt had planned to spin off and list Reshef at a valuation of about 4.3 billion shekels, but withdrew the offering after opposition from institutional investors and hedge funds that hold Aryt shares and threatened not to participate.
As of midday trading, Aryt shares were down 3.7% on turnover of 23 million shekels.