LONDON (Alliance News) - Yossi Willi Management & Investments Ltd, a major shareholder in UK-listed BSD Crown Ltd, has requisitioned a general meeting to oust all incumbent non-external directors of the company and nominate a number of directors to the board.
In a letter to shareholders sent on Yossi Willi's behalf by its legal representatives, Yossi Willi expressed concern over recent developments, the strategic direction of BSD Crown and other "value detracting actions" the company's current board has undertaken.
The letter outlined a series of events to characterise these actions.
In July a group of directors were appointed, Neomi Enoch, Gil Leidner and Iris Even-Tov, however Enoch and Leidner subsequently resigned, whilst Even-Tov who became an external director.
As such all of the currently serving directors are persons not appointed by shareholders but by the board. Following that Zvi Shur resigned as an external director in November, meaning there is now only one external director on the board.
"The resignation of the appointed board members is a clear indication as to the lack of direction of the company and the poor show of confidence that these members had in the company. Furthermore, the lack of leadership at the helm of the company during such times of turbulence, coupled with the issues set forth herein, are of great concern to our client," the letter said.
In May, BSD Crown said some USD30 million of cash deposits it held with Meinl Bank in Austria had allegedly been used as collateral for loans taken by off-shore companies unknown to the company. Additionally, in August BSD Crown filed a claim against its controlling shareholder Israel 18 BV for the return of USD13.6 million which had been deposited in the International Bank of Azerbaijan, which the bank now claims has been used as security for a loan taken by Israel 18.
In September, BSD said cash deposits of around USD2.2 million were transferred to Alko R Capta LLP in relation to a proposed purchase of some car dealerships in the US. This deal did not go through, and whilst BSD demanded the return of the deposits, they were not returned.
"These misappropriations of funds and the ongoing repatriation of company assets amount to approximately USD45 million. These funds, which have allegedly been funnelled out to certain offshore companies, cause ongoing difficulty to the company's operations and hinder the stability of the company," the letter said.
In February 2016 the Israel Securities Authority initiated an investigation of BSD Crown over suspicion of breaches of Israeli securities laws and criminal offences. A number of officers and directors of the board were questioned, including Chairman Gregory Gurtovoy, who is also controlling shareholder of Israel 18. This, the letter posits, puts Gurtovoy in a clear conflict of interests.
BSD's shares are currently suspended as the company was not able to publish its full year results for 2015 by the date required under UK listing rules. "In addition, the company has not released any financial statements of the company for 2016, and has not indicated that it has any intention of releasing them in the near future. In addition, there are currently no indications as to the relisting of the company's shares for trade on the London Stock Exchange," the letter said.
Yossi Willi, along with its parent company YM Dekel Holdings and Investment Ltd, holds an around 25.4% stake in BSD.
Yossi Willi has requested a general meeting no later than April 1, where it will table proposals for all incumbent non-external directors to be replaced, and for a group of individuals to be appointed to the board, namely, Shmuel Messenberg, Keren Marcus, Avi Zigelman, Joseph Williger and Shlomo Wertheim.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
Copyright 2017 Alliance News Limited. All Rights Reserved.
