A dispute has broken out between the founders of medical device company MDG Medical Inc., and its controlling shareholders headed by the Lauder Group. The founders, Dr. Gilead Asseo, David Haitin, Michael Cohen-Aloro, and Zvi Levinhar, claim that Lauder is seeking to remove their representatives on the company board, a move which contravenes the contractual privilege they exercise as founders, to representation on the board.
The founders claim that this is the final stage in depriving them of their rights in the company which they founded in 2001. MDG develops, produces, and supplies computerized control systems that prevent medication error in hospitals and other medical institutions. The company's systems reduce human error in medication distribution, and improve both the efficiency of medical staff and the management of hospital pharmaceutical supplies. Its systems are now installed at more than 100 hospitals worldwide.
MDG's founders have filed an ex-parte application for relief with the Petah Tikva District Court to prevent Lauder from removing their representatives from the board, and making any unilateral changes to the company's incorporation documents or shareholder agreements that would pave the way for such action.
According to the founders, the Lauder Group "simply fell in love" with the company's venture, which is on the brink of achieving annual sales in the millions of dollars, and so it decided to oust them from the company. They say the Lauder Group diluted their stakes in the company by making cash injections they could not match.
Published by Globes [online], Israel business news - www.globes-online.com - on March 5, 2008
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