Teva shareholder files for $519m derivative suit

Teva  picture: Bloomberg

Ra'bcca Technologies is also suing Teva officeholders it says are responsible for the company's violations of US law.

A petition for approval of a derivative lawsuit against Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) and past and present members of its board of directors has been filed. The petition cites alleged corrupt payments by Teva subsidiaries in Ukraine, Mexico, and Russia, as well as Teva's settlement with the US authorities.

Teva shareholder Ra'bcca Technologies yesterday petitioned the Tel Aviv District Court for approval of a $519 million derivative lawsuit against Teva and members of its board of directors during the relevant period, including Chaim Hurvitz, Shlomo Yanai, Dan Suesskind, and Phillip Frost. Also cited in the petition was the Kesselman & Kesselman accounting firm.

Through Advocates Ram Dekel, Ohad Antman, and Michael Peterman, Ra'bcca argued, "The respondents, past and present officeholders in Teva, bear responsibility for Teva's act and failure in violating US law, and should therefore compensate Teva for all the damages caused to it."

On November 16, 2016, Teva notified the Tel Aviv Stock Exchange (TASE) that it had allocated the huge sum of $500 million for an anticipated settlement with the US Department of Justice and the US Securities and Exchange Commission in respect of investigations involving violations of the US Foreign Corrupt Practices Act (FCPA). Teva made the provision after the company said that it found certain work methods and transactions had come to light liable to have constituted violations of FCPA and/or the local law.

The complainants allege that a settlement was signed on December 22, 2016 in which Teva undertook to pay the US authorities $519 million relating to the violation of US law. In the framework of this settlement, two detailed indictments for corruption were filed in the US against Teva and its fully owned subsidiary, Teva Russia. "Plea bargains were filed together with the indictments in which Teva admits the facts alleged in the indictments, and in effect admits its responsibility for the corrupt events and agrees to pay this fine… The damages include the fine paid to the US authorities, the enormous damage to the company's reputation, and heavy expenses incurred in lawyers' and accounting fees for professional consultation in dealing with the US authorities, and damage to the company resulting from organizational changes and the shutting down of the company's business in a number of countries."

Published by Globes [online], Israel business news - www.globes-online.com - on January 2, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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Teva  picture: Bloomberg
Teva picture: Bloomberg
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