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§Telit sinks over fears cat is out of bag for CEO
Tech company probes whether chief Oozi Cats is same man as Uzi Katz indicted in US
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Telit CEO Oozi Cats has taken a leave of absence © FT montage
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by: Nic Fildes, Telecoms Correspondent
There are more than 20 Uzi Katz that spring up in Boston, Massachusetts when searching online for the person and US city. Their number include a real estate mogul, a florist and the founder of the supposedly influential band Uzi Katz and the Vying Violas.
But checks made in the real world show those with the most colourful histories, including that celebrated musician, do not actually exist — they are fictions that can be mainly sourced to an Israeli search engine optimisation (SEO) company.
While the art of SEO is to promote genuine businesses to the top of Google search pages to boost sales, in this instance, the opposite has been achieved, only serving to bury mention of a real Uzi Katz and an alleged misdemeanour from long ago.
Pushed downpage by the fake Uzis — until events this week — is a link to a 1992 article about an Uzi Katz named in a wire fraud trial related to a scheme to “flip” 41 properties in eastern Massachusetts.
That piece of unresolved criminal history in Boston cast a pall over a London-listed Israeli technology company on Wednesday, with its chief executive Oozi Cats having to take a leave of absence.
Telit Communications launched an urgent investigation into whether there was a link between their CEO, who has led the company since 2000, and the accused man in Boston.
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That Mr Katz, and his wife Ruth Veronica Katz, were indicted for wire fraud, according to court documents reviewed by the Financial Times. Warrants were issued, but the couple became fugitives. Mrs Katz fled the country after posting bail, despite having her Israeli passport confiscated, according to a bench warrant. Court documents do not show that either warrant has been dismissed.
A land flip occurs when a property is bought and sold several times in quick succession using “straw” buyers. After the value of the property has been fraudulently inflated, the co-conspirators obtain a mortgage in excess of the amount a mortgage lender would be willing to advance to buy the property.
The unresolved case is now at the centre of the investigation ordered by Telit’s board and being carried out by the law firm Cameron McKenna.
It had already been a tough week for Telit and Mr Cats, with the issue of a damaging profit warning on Monday, ahead of the shock announcement on Wednesday that it was looking into “speculation regarding historical indictments in the United States of America of Telit’s Chief Executive Officer, Oozi Cats, in respect of matters which are unrelated to Telit and significantly predate its establishment”.
Mr Cats did not return calls and Telit’s board declined to comment ahead of the investigation’s findings.
On Monday, Mr Cats had said he remained “confident” of Telit’s prospects for the second half, despite cutting the dividend and warning on profits and cash. Telit highlighted an order from Tesla for its Model 3 cars as a reason to expect higher revenue over the next 18 months.
Morgan Stanley described a 35 per cent drop in the share price as an “over reaction” and Mr Cats bought 400,000 shares as a show of his faith. He had sold £24m worth of stock in May, not long after the stock peaked at 375p, in order to repay a loan. He bought the shares this week at an average price of 171p, which raised his stake in the business to nearly 13 per cent.
The stock crashed again on Wednesday after Telit opened its investigation and ended the session at 149p. It had lost half of its value over the three days.
Mr Cats had stayed in London to meet investors, but agreed with directors to take a leave of absence during a heated board meeting on Tuesday night.
An Israeli citizen, he led the listing of Telit Communications on London’s Aim market in 2005. He took control of the business in 2007 alongside Franco Bernabè, the former chairman and chief executive of Telecom Italia, who bought out the fund and majority investor Polar Investments. Telit has strong financial links to the Italian government, which has provided €76m worth of funding in the.
Quelle: www.ft.com/content/753d0446-7d01-11e7-ab01-a13271d1ee9c