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Zelekha blasts Bezeq directors' loan-funded dividend policy

The decision by Bezeq's board to allow the company to take giant loans to pay dividends has substantially damaged the company, writes Prof. Yaron Zelekha in an opinion paper. His opinion was commissioned for a lawsuit in which a shareholder is suing the directors on behalf of the company itself.

The shareholder, Assaf Zaken, is suing the board members and owner Shaul Elovitch for NIS 900 million on the company's behalf. Zelekha claims that the directors are agents of the controlling shareholder. Under Elovitch, Bezeq has paid NIS 6.9 billion in dividends and borrowed NIS 6.9 billion to finance them, Zelekha points out.

"If not for the dividend distribution since Elovitch came on board, the company wouldn't have had to take out giant loans that cost it about NIS 3 billion," Zelekha writes. "And it is possible that the Tax Authority will refuse to recognize the loans as an interest-rate cost because they weren't taken to finance revenue-generating income but for the sake of dividends."

Elovitch borrowed NIS 5.6 billion to buy Bezeq and wants to repay the money as quickly as possible, hence his thirst for dividends, but the payouts aren't in the best interests of the minority shareholders or the company itself, Zelekha concludes. (Shelly Appelberg )

Former Maalot CEO joins Procognia board

Biomed company Procognia has recruited two new people to its board of directors: Dorit Salingar, former chief executive of credit rating agency S&P Maalot, and Yoav Keidar, scientific medical adviser to Clal Finance. Procognia is a micro-cap, with a market value of NIS 14 million. It develops products for the biological drugs industry. Salingar has no background in biomed but will help shape strategy. (Vadim Sviderski )

Given Imaging CEO to receive $650,000 bonus

Given Imaging is giving its chief executive Homi Shamir a bonus of $649,000 for 2011. The audit committee and board of directors approved the bonus, which must still be approved by a shareholder meeting on May 12. The company also intends to give Shamir 35,000 shares in three tranches. The shares will be locked up - he may not sell them for a certain period of time. That too depends on shareholder approval. Given Imaging reported a net profit of $12 million on turnover of $118 million in 2011, after netting $8.5 million on turnover of $158 million in 2010. Shamir's bonus would be equivalent therefore to 5.6% of the company's profit. (Yoram Gabison )

Perrigo launches generic tablet for chest congestion

Perrigo last week announced the launch of its generic version of Mucinex extended release tablets, an expectorant indicated to relieve chest congestion ("to make coughs more productive," the company helpfully explains ). Annual U.S. sales of the drug are about $135 million in the last 12 months, Perrigo says. At this stage, Perrigo is selling the tablets in bottles to select customers; the full launch of the over-the-counter drug, in blister packaging, should begin by mid-year. Perrigo has a pipeline of OTC drugs worth some $18.7 billion in terms of potential sales of the brand originals. (Yoram Gabison )

ABB invests in Israeli water startup TaKaDu

Electricity infrastructure provider ABB boosted its water business last week by leading a $6 million investment in startup TaKaDu, a water infrastructure monitoring company. A study last year by Lux Research estimated the size of the global drinking and wastewater infrastructure repair market at $17 billion annually.

Cities lose water through leaks and inefficiencies; water companies call this "non-revenue water" because they treat the water but cannot charge for it since it does not reach customers. "A city such as London loses 30% of its water; over 600 million cubic meters," said TaKaDu VP Marketing Guy Horowitz.

TaKaDu offers water infrastructure monitoring: Its software links to sensors in the water network like flow meters, quality sensors and pressure meters. Geographical information system data, maintenance records, access control records and seasonal fluctuation data are also used. All this data is crunched to detect problems like leaks, inefficiencies and faults in the water network.

Thames Water, which runs London's water system, detects leaks up to nine days earlier with TaKaDu than with its previous system. (Reuters )

Leader: Big deficit will hurt government bonds

The larger-than-expected deficit that the government is likely to run this year will depress prices of Israeli government bonds, predicts Leader Capital Markets. It forecasts that the Finance Ministry will step up issuance in the second half of 2012 to feed the big deficit.

Meanwhile, Psagot predicts that the consumer price index will rise 0.3% in April, thanks in part to seasonal increases in food prices - but the brokerage notes that some of the increases usual in April happened in March this year.

Leader Capital Markets thinks the CPI will increase 0.2% in April, partly because of increases in fuel and housing prices. Bank Leumi, for its part, says that if there are surprises in the April CPI, they will be on the upside because of the increase in electricity prices. (TheMarker )