Founder and CEO of Adika Retiring Against Golf: “Tractate of Prohibited and Harmful Actions”

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The founder and CEO retiring against Adika and the board of directors: Dedi Schwarzberg filed this morning (Monday) in the Tel Aviv District Court a request for disclosure of documents before filing a derivative lawsuit against Golf Group, which controls Adika, and against several members of its management – including Golf CEO Raviv Brockmeier , Nofar Malubani and Avi Fischer.

Read more in Calcalist:

The request is to oblige Adika, who founded and retired from it after a dispute with a golf team, to transfer to him immediately and without delay documents and minutes from board meetings and correspondence held with the controlling shareholder.

Right: Founder and CEO of Adika HaPorsh, Dedi Schwarzberg, and CEO of Golf Raviv Brockmeier Photo: Dana Keren, Inbal Marmari

The application states that on June 2 this year, Schwarzberg asked to appoint an external examiner on behalf of the board to examine serious incidents that took place in the company. In the meantime, he appealed to the company demanding that “its rights against Avi Fischer, Raviv Brockmeier, Nofar Malubani and against the Golf Group be exhausted,” for compensation for the damages caused by their conduct toward Adika.

According to Schwarzberg, the company’s officers refuse to examine the liability of the controlling shareholders or anyone on their behalf, “for a series of prohibited and harmful actions carried out in or in connection with the company, while choosing to turn a blind eye to these actions and even consult with the controlling shareholders.”

The conflict that led to the retirement of 15 senior employees

According to the claim, the controlling shareholders of Adika – Golf Group and Clal Industries (Manuscript), which controls Golf – act in relation to the company “themselves or through Mr. Avraham Fischer, Chairman of Clal Industries and the Living Spirit in the controlling shareholder, and with the assistance of company officers appointed by the owner “The control, in clear violation of the rules of proper corporate governance, and while exerting continuous and unlawful pressure on the company’s officers, in order to cause them to act in violation of their obligations under the law.”

Schwarzberg accuses Golf and Katsh of approving stakeholder transactions that benefit the controlling shareholder illegally, securing company officers from information and violating their powers, and exerting pressure on various officers to withdraw from business plans and moves approved by them and support the controlling shareholder’s interest at the expense of interest. Society and at the risk of its existence.

These moves led to the retirement of about 15 executives and senior employees of the company, including the company’s CEO. Schwarzberg reveals that two directors in Adika who were appointed by the controlling shareholder themselves “were asked by the controlling shareholder to terminate their tenure because The controlling shareholder or were forced to resign due to improper pressure exerted on them. “Regarding an external director who served as chairman of the audit committee, Schwarzberg claims that he” received threatening letters from the controlling shareholder close to his resignation. ”

It was further alleged in the application to the court that the controlling shareholder waived an orderly transfer of several months of Adika’s management, and appointed a new management within a month, “to ensure that the controlling shareholder can do as she pleases.”

Adika's store Adika’s store Photo: Camila Simon

“Harmful actions and exerting pressure that caused serious damage”

It was further alleged that violations of various fields also occur in the company, including violations of securities law, publication of incomplete and unreliable reports to the public, violation of labor laws in relation to a series of workers’ rights and illegal dismissals and in the absence of a hearing. As well as a violation of company law in relation to the manner of approving actions in which the controlling shareholder or anyone on her behalf has a personal interest and more.

“The applicant, as well as other officers and other senior employees who have terminated their positions at the company, have repeatedly contacted the company’s board of directors and warned of harmful actions and pressure exerted by the controlling shareholders, which caused or may cause serious harm to the company. “The audit committee and the board of directors completely disregard their duty. This conduct is apparently backed up by biased and non-objective legal advice that the candidate for the company’s board of directors has in accordance with the controlling shareholder’s requirement.”

“Since the applicant’s inquiries to the company were not answered, and in view of the ongoing involvement of the controlling shareholder and its representatives in the company’s activities and management and especially in light of the extent of pressure from the controlling shareholder to which the board members are directly exposed, the applicant contacted the company several times in writing. An outsider who will be entitled to receive information from the various parties, to meet and receive testimonies from the officers and who will give a detailed report on his investigation and conclusions. The company rejected the applicant’s offer, and even rejected his claims outright stating that they were “unfounded”. “Minutes of the board of directors from meetings in which he participated as a director of the company, information which was requested in order to shed light on the applicant’s allegations regarding the conduct of the controlling shareholder and the company’s officers and the results of that conduct.”

“Controlling conduct in violation of corporate governance rules, actions taken in the best interests of the company and contrary to the company, while the company refuses to examine the allegations and transfer materials and information, most likely causes serious and irreversible damage to the company, and obliges the applicant to apply to the courts,” Schwarzberg notes. To the court.

Adika responds: “Unthinkable”

Schwarzberg reveals that “in his letters to the company, documents were presented that indicate the poor corporate governance in which the company operates; the manner in which the controlling shareholder operates; a letter of threats sent to the chairman of the audit committee; Letters from the controlling shareholder to the company’s board of directors regarding transactions in which the controlling shareholder has a personal interest, while ignoring the aggrieved party’s personal and conflicting interest; Correspondence and statements indicating that the controlling shareholder convened board meetings of the company independently; “The words of Mr. Avi Fischer were also presented, according to which the authority to decide on the granting of options in the company (which is given by law to the board of directors) is given to his decision and his decision only, as a representative of the controlling shareholder.”

The documents show that Adika reported on the continuation of Schwarzberg’s tenure as an officer in the company, even though he received an explicit instruction not to come to the company’s offices; And made misleading reports of concessions on the new CEO’s salary, “although in practice full pay was paid except for nine working days (while the shareholders’ meeting is asked to vote and approve the remuneration due to him, while material information is hidden from it).”

According to him, the company refused to provide him with minutes of board meetings in which he participated, and which are supposed to reflect the fabric of pressure that the controlling shareholder illegally exerted on the company’s management; On the participation of the controlling shareholder’s representatives at the company’s meetings who discuss matters in which she has a personal interest (without disclosing this to those present), and more. The company also refused to carry out an objective examination of the applicant’s claims and rejected his demand that the company exercise its rights against the controlling shareholder, as well as against Avi Fischer, Raviv Brockmeier and Nofar Malvani. ”

Adika’s board of directors said in response: “David Schwarzberg’s behavior continues to shock everyone involved. It is inconceivable that a CEO, who abandoned the ship with his partners in the middle of the Corona crisis, would allow himself to take out the company and its owners in an unprecedented way. Adika’s Board of Directors appointed an independent committee, consisting of external directors who were not involved in the matter and with close external legal assistance. The committee examined all of Schwarzberg’s allegations, invited him to appear before it and at the end of the process found no flaw in the company’s conduct. We are proud of the company and its success and are determined to march Adika forward to new heights. ”

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