HP Europe Rescinds Dismissal of CEO, Local Executives

A dramatic about face in this weekend's HP Israel affair took place yesterday, as HP Global rescinded the firing of CEO Gil Rosenfeld and 13 other local branch executives. Rosenfeld's lawyer, Tamar Golan, received notice yesterday evening that today's meeting where the executives were to receive their pink slips was indefinitely postponed.

With this, Rosenfeld and his lawyer intend to submit a petition to the Tel Aviv Distrit Labor Court for a restraining order to prevent the company from terminating his employment until receipt of a report on the investigation into his affairs at the company.

Even before this announcement, HP Europe representative Jan Zadak had made it clear that Rosenfeld was not personally, but administratively, responsible for the gray export affair. Zadak was referring to suspicions that HP Israel had sold products designated for the Israeli market to other countries at cheaper prices.

Rosenfeld said yesterday, "If God forbid we erred, I, as a manager, am prepared to take responsibility and accept the verdict. But, we didn't do anything, and I am not ready to take the false accusations without evidence."

According to Rosenfeld, "In contrast to the humiliating letter HP sent, in which it was written they found I was personally involved in the gray market in Israel, they retracted those statements. They talked about administrative responsibility and not about personal responsibility. It amazed me that despite all the requests of the last several weeks, they either couldn't or wouldn't present me with any of their findings."

The affair was leaked to the press even before it was determined that the executives would be fired. Associates of Rosenfeld pointed a finger at Udi Graff, HP Israel's former CEO, as the one who let the cat out of the bag. Graff refused to comment on the charge.

Rosenfeld and his lawyer arrived at the Tel Aiv Hilton yesterday with additional executives to attend a hearing with senior HP Europe representatives, including Zadak. From the start, they informed the officials they did not consider the hearing fair because rules in Israel require a number of conditions for a hearing to be valid, which was not the case at the Hilton.

Golan told HP Europe executives that details of the investigation were leaked to the press, where Rosenfeld learned about his firing. She presented a slew of newspaper articles with details of the investigation.

Associates of Rosenfeld claimed the affair broke as follows: One of HP's workers sent an e-mail in which he asked not to be credited for certain previous sales. Rosenfeld was shocked by the e-mail because it implied the employee had formerly engaged in the gray market but had now gone straight, requesting not to receive bonuses on account of these shady deals.

The same worker informed his superior, which led to Rosenfeld to order a meeting of senior management about the sales. Rosenfeld later turned to the investigative committee the company had set up to look into gray exports, but the committee asked him not to take further action.