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Chief executive of Israel supermarket chain arrested

The controlling shareholder of one of Israel’s largest supermarket chains was arrested on Sunday on suspicion of corruption.

Rami Levy, chief executive of Rami Levy Hashikma Marketing, as well as a local politician, another businessman and a reporter were detained for questioning for alleged fraud and breach of trust involving the owners of a shopping mall and the local municipality, according to a police statement.

Mr Levy was later released from police custody on house arrest for three days.

Details of the investigation, including the identities of the other suspects detained, were under a police gag order. Police said the questioning of the suspects came following an undercover investigation, including a search of a regional council’s offices and the suspects’ homes.

The company said in a statement to the Tel Aviv Stock Exchange that the allegations involve “a property under private ownership of a majority shareholder of the company along with an additional person. The property isn’t part of the properties of the company and isn’t under its ownership.”

Rami Levy has a market value of Shk2.5bn ($713m), and Mr Levy controls 45 per cent of the shares.

The Tel Aviv Stock Exchange halted trading of Rami Levy stock ahead of the announcement, but news of Mr Levy’s arrest sent it tumbling: it was down 6 per cent at the end of the day’s trading on the Tel Aviv exchange.

Mr Levy is the majority shareholder and founder of the company, which operates 45 discount supermarkets in Israel and the West Bank, and a telecom company of the same name, employing more than 6,000 people.

The company also distributes wholesale goods and clothing, and has expanded into real estate, including developing a joint Israeli-Palestinian shopping mall halfway between Jerusalem and Ramallah.

At the end of the second quarter of 2017 the company announced a 31 per cent rise in net profits compared with the same period last year. Earnings rose more than 14 per cent.

Mr Levy also serves on the Jerusalem city council as Mayor Nir Barkat’s coalition chairman.

Source: Financial Times

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