Signs of a rift between the management of Life Wave Hi-Tech Medical Devices Ltd. and its key shareholders have now emerged for the first time since the Israel Securities Authority began investigating the company over alleged share ramping in the haredi sector. Company chairman Aviv Bushinsky today sharply attacked LifeWave shareholder and former board member Moti Kugel, claiming that he had concealed his conviction for impersonation and using a forged passport by the Ramla Magistrates Court from both the company and himself.
Kugel was convicted in December 2006 - a week after LifeWave's IPO - and he was still on the company board at the time. After falling by 76.2% last week, LifeWave's stock rallied today, ending the session up 13.12%.
"The individual in question is a minority shareholder, who concealed his criminal past from the company," said Bushinsky today. "We condemn any form of unlawful conduct, and the company will take whatever action it can to ensure that no person with a criminal conviction will ever hold company shares in the future." Kugel resigned from the company board in March and he is no longer classed as a party-at-interest. He has, however, been interviewed twice about the company on "Kol Hai" radio. LifeWave said in response that Kugel initiated these interviews himself, and that he was not acting on behalf of the company.
Bushinsky's attack is surprising, given that Kugel is the son in law of Reuben Schulman, and a friend of Itzik Koifman, the company's controlling shareholder. This could mean one of two things - either the group has decided to make a clean break and distance itself from Kugel, or Bushinsky decided of his own volition to confront the leading shareholder group within the company.
"I will not allow the company or its professional staff to come to any harm because of one person," he said. "A person with a criminal record is not fit to hold shares in public companies, LifeWave included - but unfortunately the law does not prevent this. My board colleagues and the company management wish to reiterate their absolute confidence in the company and in the products it is developing. I have watched aghast over recent days the attacks on the company and the attempt to portray anyone associated with it as being implicated in improper activity. These are people that invested their money and skills in the promotion of the company and the development of its products."
Published by Globes [online], Israel business news - www.globes.co.il - on April 25, 2007
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