Borgas resigned after sexual harassment allegations

Stefan Borgas

The outgoing Israel Chemicals CEO has been replaced by COO Asher Grinbaum who becomes acting CEO.

Israel Chemicals (TASE: ICL: NYSE: ICL CEO Stefan Borgas has been replaced by acting CEO Asher Grinbaum, the company’s former executive vice president and COO (who was to complete his term office by the end of 2016).

A brief and laconic announcement to the stock exchange on Thursday evening marked the end of Borgas's challenging tenure as the head of Israel's fertilizer giant, during which it faced a global drop in potash prices, a prolonged employee strike, arduous government regulation forcing ICL to invest billions of shekels in salt harvesting, and an extensive streamlining spearheaded by Borgas in the past two years.

However, his resignation seems to be motivated by an entirely different reason: a complaint regarding alleged sexual harassment, filed against Borgas several months ago by a senior ICL executive who had been axed. This alleged harassment had taken place after ICL executives had dined in one of Tel Aviv's restaurants.

As far as we know, after the dinner, Borgas accompanied the employee to her home, which was only a few dozen meters from his own. He then asked the employee to go up to her apartment, in order to get an impression of the place. When they parted, Borgas hugged and kissed the employee, according to her version against her will, and causing her to feel emotional distress. Borgas, on the other hand, claimed that this was an innocent and friendly kiss, not exceeding the acceptable norms.

"This was an innocent parting kiss which occurs many times daily in companies, if the employee felt that she was harassed, I am sorry and apologize. This has nothing to do with my resignation from the position of ICL's CEO," Borgas said.

Two months after the employee was fired, and during talks regarding the terms of her retirement, the ICL board found out about this incident. The board of directors, then headed by Nir Gilad, decided to transfer this issue for the examination of Judge (ret.) Ornit Agassi. Last Tuesday, Agassi submitted her conclusions, which determined that this was sexual harassment, even if only in the milder sense of the term.

On the next day, the board announced that it will convene on Thursday evening, among other things to discuss the implications of this report. For Borgas, the report was the 'smoking gun' ICL has put on his table, and although he disagreed with its conclusions, he immediately understood that he had no choice but to resign. He preferred be proactive and announced his intention to resign on Wednesday.

Sources in ICL claim that following legal consultation, the stock exchange announcement regarding the resignation did not include information on this incident, but only that Borgas attributed his resignation to personal considerations. This laconic statement concealed the crux of this matter, and did not initially reveal to the public the real reasons for Borgas' decision to resign.

Today, ICL commented, "Due to the Prevention of Sexual Harassment Law, the company is prevented from providing any detail or document regarding the complaint or its very existence."

Published by Globes [online], Israel business news - www.globes-online.com - on September 11, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

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Stefan Borgas
Stefan Borgas
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