10 senior executives at the Aeronautics Ltd. (TASE:ARCS) defense company, headed by CEO Amos Mathan, will be indicted for aggravated fraud, subject to a hearing at the economic unit in the State Attorney's Office. Notices about the hearing were sent to Mathan, VP business division Meir Rizmovich, former development division manager Haim Hibsher, marketing manager David Goldin, and other employees.
The employees and executives involved were investigated over the past year in connection with a deal by Aeronautics with a customer described as an "important" overseas customer. The court imposed a gag order on the case and developments in the investigation.
The investigation was led by a joint team of the Israel Police 433 National Serious and International Crimes Unit in the Lahav 433 section and the investigative unit of the Director of Security of the Defense Establishment, accompanied by representatives of the State Attorney's Office economic unit.
The indictment prepared by the State Attorney's Office against the Aeronautics executives is for aggravated fraud and aggravated offenses under the Defense Export Control Law. This law is designed to protect Israel's diplomatic and defense ties against the unauthorized export of defense know-how or products.
Aeronautics stated in response, "We are convinced that after our views are heard for the first time in the hearing, the State Attorney's Office will make an informed decision that neither the company nor its officeholders should be put on trial and will order the case closed."
Aeronautics is being represented by Advocate Nati Simchony and Advocate Assaf Klein. The company also said, "The company will now redouble its efforts to develop its business, to close deals that are in various stages, and to serve its many customers in Israel and around the world."
Aeronautics, which is controlled by the KCPS, Viola, and Bereshit funds, held its IPO at a company value of NIS 1 billion. Rafael Advanced Defense Systems Ltd. and businessperson Avichai Stolero recently made a NIS 430 million bid to acquire the company, 60% less than its IPO value. Aeronautics rejected the bid a week after it was made, saying that it was too low. The company's chairperson is former Israeli navy commander Vice Admiral (res.) Yedidia Yaari, who served as Rafael's CEO for many years.
Published by Globes [online], Israel business news - www.globes-online.com - on August 29, 2018
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