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"On February 16, [Clubmarket owner] Dedi Borovich sat here, in my room, and told me bluntly that things at Clubmarket were absolutely fine."

And that's how Dan Propper, CEO of Osem Food, began his interview with Haaretz yesterday. He is an angry man, head of one of many suppliers hit by the collapse of the supermarket chain, which owes NIS 1.4 billion, mostly to its suppliers.

Clubmarket has been granted court protection from creditors until August 17, and meanwhile, its owners have been bearing the brunt of a stream of angry parties, from suppliers and banks to the public, left holding millions of shekels worth of the chain's Extra Tav vouchers. (See separate report below)

Propper slammed Clubmarket's owners earlier this week, calling on the business world to "vomit out this filth." Borovich replied that he did not even know Propper, and that it was he, the Osem CEO, who was "selling a bill of goods."

Propper now has called for a court investigation into alleged financial irregularities by the chain's owners. "It's about time we heard the truth," he said. "I asked the court to appoint an investigator to check the following: expenses, shareholders' loans, what the chain's people really knew, and what happened with the finances.

"The world is full of rumors and no one is checking them, and there is a good chance that the evidence will be destroyed."

Propper is hoping that such a probe will result in the court's forcing Clubmarket owners - the Borovich-Mozes families and company chairman Yossi Rosen - to stump up their own money to pay back the creditors. "This way, I want to get to their deep pockets so that they'll start paying."

Osem's CEO was not going to count himself with the silent majority, as he put it. "Sometimes you have to go out and say things with ethical, moral, cultural implications, and on the way of life that we would like to see."

Propper accused Clubmarket's owners of deliberately misleading him about the company's financial situation, saying it was profitable. "If they stopped releasing their financial statements in mid-2004, as has been reported, then there is no better proof that the owners of the business and its managers knew about the true situation," he said.

"I saw how in this irresponsible manner, in my opinion, they led to the company's failure when the reports came out that they had taken shareholders' loans. I also asked Ginsburg [former Clubmarket CEO Yaakov Ginsburg, who resigned last week], and I didn't get a straight answer. Later, I saw them issue their credit vouchers - which, post facto, clearly was a case of printing money with no cover; they printed junk. Whoever buys a gift voucher doesn't think for one moment that they won't be honored - and these [Clubmarket] people clearly should have realized that they couldn't honor them. Out of the NIS 200 million printed, some NIS 35 million is still out there - they exploited the public. They dipped their hands into the public's pockets and took out money. They simply, barefacedly misled the public."

And Propper insisted he will not keep quiet now, "otherwise, I fear that if this issue goes quietly, then we'll see another case of the same thing."

Who set up your meeting with Borovich?

"The [February 16] meeting came about because I had been talking with Clubmarket's people for many months, from CEO Ginsburg to chairman Yossi Rosen, with whom I had a few casual conversations. My people spoke to Ginsburg's. We said that we had the feeling that things were not being managed well, that the chain was selling goods at a loss, and in our opinion this could lead to its downfall.

"We also had a warning from the credit insurance company, which lit up a red warning light about Clubmarket. I asked Izzy Borovich - whom I've known for years - to set up a meeting with [his brother] Dedi, whom I didn't know, so that I could explain the situation as I saw it. I wanted to say that I find myself in a problematic situation... I was troubled by our exposure to Clubmarket and the chain's management, which would clearly not lead to anything good. Izzy set up the meeting, sat at the side, but did not join in. He has no shares in Clubmarket. I felt that he was embarrassed by Dedi's harsh words."

What did you talk about?

"I laid out the position as I saw it, and asked Dedi Borovich for guarantees - without specifying whether personal or from Clubmarket... My exposure to the chain was larger than what it is today. I said I called the meeting, because I wasn't satisfied with the answers I received from his people. The basic thing I demanded was that he increase the credit insurance, and that I couldn't continue supplying goods as usual without this.

"This was answered quite harshly by Dedi when he said: `Everything at Clubmarket is absolutely fine. I don't know what you're talking about. We don't need you. Stop talking to me about credit insurance, and if you talk to anyone else about the chain's situation, your ass will be on the line!'"

That's not Dedi Borovich's way of talking. What did he really say?

He told me, `If you tell anyone, I'll know about it very quickly. I listen to the reporters and the press. I know everything that's said, and it won't be good if I find something that you said to someone from the media or if you spoke to anyone at all,' and other harsh words like that. So I answered: `I don't want to be dragged down to that level. I insist that you increase you credit insurance. You've heard my opinion on the chain's situation. If you don't increase your insurance, I'll have to cut back our activities with you'."

"He said, `If that's what you want, then cut back. If you want to cut back, I'll make sure that by the end of the year you'll be selling the chain half of what you sell today'... His tone was aggressive. I wasn't shocked. I didn't lose a moment's sleep over what he said. I was more worried over the chain's situation."

Why don't you attack Rosen? Is it because he's one of the "nice guys"?

"Rosen was there. He knew the situation. He was chairman; he's an experienced man. He also said that everything at the chain was fine. But I think he was dragged along by Borovich. Not that that absolves him. I think he's the tragic figure in this story."