Malam Systems, controlled by Gad Zeevi, today announced it is demanding that Geo Interactive cancel the separation agreement signed between the companies in 1995 and honor its investment agreement in Geo Interactive, under which it is entitled to 50.1% of Geo Interactive.
As far as is known, Geo Interactive, which deals with audio-video transmission over Internet and wireless, cooperated with Malam when Geo Interactive was first set up. The cooperation included the granting of a loan of several hundred thousand dollars to Geo Interactive. Negotiations took place in 1995 concerning Malam’s investment in Geo. According to Geo Interactive, the agreement was never signed. Malam claims that owing to a false presentation by Geo Interactive the agreement was cancelled, and the agreement should therefore be honored and 50.1% of Geo Interactive transferred to Malam.
If the agreement is enforced, Malam will return the NIS 1.6 million loan repayment it received from Geo Interactive at the time of the separation agreement. Geo Interactive is traded at a $2 billion value on the London stock exchange, while Malam is traded at a $51 million value on the Tel Aviv Stock Exchange.
According to Geo Interactive, Malam’s claim is an attempt at extortion from a public company, and the story is groundless. Responding to the statements of Geo Interactive and its entrepreneurs, the attorney representing Malam said, “Without discussing the case in detail, the claims are serious and weighty, backed by documents and evidence.”
Geo Interactive chairman Naftali Shani harshly criticized Malam’s demand: “The story is groundless. It is really pathetic. It is very sad to see the ethics that Gad Zeevi brings to the Israeli business world.”
Published by Israel's Business Arena on October 23, 2000