The supposed sale of a 37% stake in medical device Life Keeper to Taiwan computer hardware manufacturer Micro-Star International Co. Ltd.(TSE: 2377) (MSI) for $370 million by Bnei Brak based start-up SafeSky Software is becoming more and more confusing.
MSI finance department customer relations manager Jhih-Jhuang Chang told "Globes" today, "I have never heard of this company. We are considering what steps to take. The matter is being handled by our legal department.
Yesterday, Richard Stuart of MSI's London office also denied any knowledge of the deal.
Life Keeper is a patch that claims to monitor pulse rates and record critical or sudden changes, and is able to warn of heart attacks 30 minutes before they occur.
"Globes" can also reveal that SafeSky was only registered as a company two weeks ago and one of its owners Arik Klein has spent much of the last decade in prison.
Yesterday morning several Israeli newspapers reported what looked like one of the year's biggest Israeli deals. However, a "Globes" investigation raised questions about the supposed deal. Why is MSI denying knowledge of the deal? MSI has a market cap of $658 million and not $21 billion as was reported by the Israeli media yesterday. Does the device have approval from the US Food and Drug Administration (FDA) and does it even have a registered patent?
SafeSky Software founder and 50% owner Dr. Amos Buchnik told Galei Zahal (Army Radio) this morning, "There is a deal. We don't have to answer to anyone. We'll publish when we want to."
"Globes" editor-in-chief Haggai Golan who was also interviewed on "Galei Zahal" said, "We made our own investigations and it became clear that we were referring to 21 billion Taiwanese dollars, which is worth US$680 million. In short, there were many question marks including where is the FDA approval? It all seems too good to be true."
Golan added, "You have to remember we are talking about a deal that gives the Israeli company a value of $1 billion. Usually in cases like this you have official approval. You enter the site of the FDA, the American body that approves treatments, and you try to see if the treatment has one approval or another. Before somebody would pay $370 million I suppose he would conduct many checks. But none of these things seem to have happened."
"Galei Zahal" correspondent Niv Riskin said to Dr. Buchnik, "Let's talk for a moment about registrations. Your company's CEO Dr. Gabi Picker claims that Life Keeper has FDA approval for marketing in the US. Do you stand behind that statement?"
Dr. Buchnik responded, "The patch 100%. We stand behind it. The patch has four registered patents, and if necessary, and we want to we will show you the registered patents. We won't make them up - we will show them."
Published by Globes [online], Israel business news - www.globes-online.com - on July 7, 2009
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