A blow to the IAI issue? – Capital Market

State Comptroller and Ombudsman, Matanyahu Engelman, Announced that it would examine the IAI issuance. His office examines the risks arising from IAI’s financial statements to ensure that the state and the public will receive the highest value from the expected IPO.

The auditor explained that the ministry had set a goal in which the financial audit of government companies, public corporations, local authorities and all the audited entities would be expanded.

IAI is a business company, one of the largest exporters in the economy (annual sales of about NIS 14 billion, of which about NIS 10 billion for exports to about 90 countries around the world), operating in a highly competitive international market (the Aerospace & Market). Defense) where huge companies such as Boeing, Lockheed Martin and more operate. Most of the prominent companies in the company’s areas of activity do not have a government holding and most of the companies are traded.

In recent decades the privatization process of government companies has been accompanied by voices of support such as voices of criticism regarding their pricing. The State Comptroller seeks to present a regulated policy on the matter.

According to the auditor, “In a report we published in March 2020 on the asset arrangement with the IEC, we saw that there was a significant impact on the listing of assets on the reform costs. We found that the asset arrangement was formulated on many. Therefore, there are many assets for which negotiations on their return to the state have not been negotiated, and the possibility that some of them may be material to the state cannot be ruled out. ”

According to the Comptroller, at the time of signing the agreement, the state held an estimate of the value of only 27 properties, out of the list of 220 properties that HHI transferred to the state. “The rights of the state and the scope of the concessions it agreed to in negotiations with the company,” he explained.

The auditor recommends in the report that the Accountant General’s Division and the Government Companies Authority routinely hold a complete list of assets held by all government companies and including information on the nature of the property and details of its use and that the Government Companies Authority and the Accountant General examine Full expression in the financial statements.

“Now that the aerospace industry is about to go public, we need to make sure that the state and the public are maximizing value from the future public offering and that the entries in the reports are as required,” the auditor concludes.