Owners took 2 million shekels from Best: Securities Authority expected to intervene

This is certainly not how the real estate company Best planned to begin its post-IPO era. Less than three months after trading commenced on the Tel Aviv Stock Exchange, it emerged that internal control mechanisms had failed: irregularities were discovered in the conduct of the controlling shareholders, the Tanous family (69%). In response, Best's stock fell by 5%. Market sources now estimate that the Securities Authority will likely conduct an investigation and may impose fines on the company.

The financial irregularities were uncovered following an audit by the Tax Authority at a subcontractor of one of Best's subsidiaries. On August 20, Best reported that the controlling shareholders had "mistakenly" withdrawn 0.7–1 million shekels from company funds to pay a third-party contractor.

A week later, the company updated its disclosure, revealing that the controlling shareholders had actually paid over 2 million shekels from company funds for private work on properties owned by themselves and their relatives. The company admitted these actions were "illegal and not in accordance with company procedures" and pledged to restate its financial reports for 2025 and the first quarter of the current year.

Best’s management, led by CEO Elias Tanous and Chairman Rafi Bisker, stated that all funds were immediately returned with interest. However, market observers believe the Securities Authority will launch an investigation to determine whether this was a case of negligence or intentional concealment. Last year, the Authority fined Rami Levy's company over 1.5 million shekels for material reporting errors.

The Securities Authority stated: "The Authority does not comment on matters concerning reporting companies. If required, this will be reflected in the company's reports."

"A public company should be run like a pharmacy"

Best attempted to downplay the incident, describing it as a "mistake" and a "non-material project." However, any transaction involving controlling shareholders—who inherently face a conflict of interest—is considered material for a public company, regardless of the amount.

"Irregularities involving a controlling shareholder are perceived as an indication of deeper problems in corporate governance," analysts noted. Experts argue that public companies require flawless management: "Anyone dealing with public money must guard it ten times more carefully than their own private funds."

Where were the gatekeepers?

Questions are also being raised about the "gatekeepers": the auditors (EY) and the underwriters (Barak Leumi, Phoenix Underwriting, and Leader), who approved the IPO prospectus. "The fact that internal controls did not block a private payment through subcontractors is a glaring red flag," market sources explained.

An associate of Best noted that the company must now "be holier than the Pope" to restore investor trust. Moving from a private family business to a public entity requires an immediate shift in corporate culture.

A pattern of irregularities

The Best incident is the fourth case in recent months involving irregularities among companies joining the Tel Aviv Stock Exchange. Previous cases led to the collapse of Symed and Cohen Properties, and the suspension of trading for Tomer Mazon. Market figures agree that this sequence of events is problematic and raises concerns regarding the corporate governance standards of new public companies.