In an unusual announcement to the London Stock Exchange on Wednesday, Israel’s Telit Communications said founder and CEO Oozi Cats was taking a leave of absence while it investigates allegations he is a fugitive from a fraud indictment in the U.S.
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Citing “speculation regarding historical indictments,” the internet-of-things company said its board had appointed independent solicitors to conduct a thorough review of this matter. Cats could not be reached for comment.
“Pending the outcome of this review, the board have agreed to Mr. Cats’ request for a leave of absence from the company,” the company said, adding that Yosi Fait, finance director and president, will serve as interim CEO.
Telit shares, which are traded on the LSE’s junior AIM exchange, had plunged 35% in late trading to 119 pence ($1.54) on the news.
The company provided little other information except to say that the alleged indictment had nothing to do with the company and was in connection with events that occurred before its founding in 2000.
Journalist Tom Winnifirth of British trading website, Shareprophets reported Tuesday that one Oozi Cats was indicted by a court in Boston in 1992 on counts of wire fraud, though under a different spelling of the same name.
According to Winnifirth, records from the district court of Boston, Massachusetts show that an individual named Uzi Katz was indicted on January 8, 1992 for wire fraud, and a warrant was put out for his arrest. The records also refer to the defendant as a “fugitive.”
That may not be the same person named in the court documents as Oozi Cats, but a Financial Times report on the issue said a person close to the company confirmed that the CEO sometimes spells his name as “Uzi Katz.”
Telit has seen its stock come under severe pressure this year, losing by two thirds of its value in just three-and-a-half months. In May Cats sold off more than seven million shares in the company for more than 24 million pounds.
Earlier this week it reported a $6.7 million loss for the first half, turning around from a $4.7 million profit a year earlier, and cancelled its dividend. In addition, the company said there were delays in its getting U.S. certification for its LTE products.
The company, which makes products, platforms and services that it says enable devices to communicate wirelessly, got its start as an importer of cellphones before it changed direction to focus on machine-to-machine communications. It went public in London in 2005 but only came to investors’ attention in recent years as IoT became a hot technology.
Cats, 53, had previously been the founder and head of Auto Depot Israel.