Did Danny Biran get to buy Koor Trade on the cheap?
Danny Biran, formerly president of Koor Industries (NYSE: KOR), bought the company Koor Trade together with that company's workers. Capital market sources note that Biran and the Elbit Systems bought the company a few months before IDB (TASE: IDBH) completed its takeover of Koor, and claim the prices were sweetheart ones for the buyers.
In any case it was an insider transaction, since Biran was at the time also one of the people owning Koor itself. Therefore, the deal was brought before the Audit Committee at Koor, after which it passed through the board of directors.
Koor Trade engages mainly in exporting to the Far East and Africa.
When IDB bought Koor six months ago, the deal didn't include Koor Trade.
Biran confirmed that the Koor Trade workers bought the company with him, but he says they didn't get a low price, and the deal had been approved by the relevant company organs, such as Koor's audit committee.
In Koor's financial statement for the year 2005, the company wrote that it had written off $5 million from Koor Trade's value. At the time chief financial officer Ron Meydan explained that Koor had decided to sell Koor Trade because it had become non-core. It therefore had the company appraised and concluded that the writeoff was necessary. Koor Trade's value in Koor's books is presently $8.5 million.