Former IDF Chief of Staff Gabi Ashkenazi has announced his resignation as CEO of Shemen Oil, two weeks after the company declared that its Yam 3 well is a dry.
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Eyebrows were raised when Ashkenazi – who stepped down as IDF chief in 2011 after four years at the helm – was named Shemen CEO in November 2011, despite having no experience in the field. He was reported to be earning around $680,000 a year, in addition to a generous stock option package.
Shemen and its partners invested around $170 million in the Yam 3 well, making it the most expensive oil exploration project in Israel's history. Public funding covered the lion's share of the project's cost.
Earlier this month, permission to file a $180 million class-action suit was submitted to an Israeli court. The suit seeks to prove that Shemen and its directors, including Ashkenazi, deliberately misled the public over the chances of finding oil in the Yam 3 well and that it willfully withheld scientific information from investors. According to the plaintiff, "the company published false or misleading announcements, which misled investors and created false expectations that high-quality oil would be discovered."