LONDON – Stock in Telit Communications soared on Monday after the company’s CEO resigned over an undisclosed criminal indictment in the US.
The company said in a statement on Monday: “The independent review has found that the evidence shows that an indictment was issued against Oozi Cats in the US and that this fact was knowingly withheld from advisers.”
Under the name Uzi Katz, he was indicted over allegations of wire fraud in the US in 1992, according to reporting by the Financial Times.
Cats took a leave of absence from the company last week while the board investigated the allegations, which emerged in the Italian media.
“It is a source of considerable anger to the Board that the historical indictment against Oozi Cats was never disclosed to them or previous members of the Board and that they have only been made aware of its existence through third parties,” the company said on Monday.
Stock in the AIM-listed firm, which works in the internet-of-things sector, jumped more than 8% on the news:
Yosi Fait will continue as interim Chief Executive Officer.
Under the name Uzi Katz, the Telit founder was allegedly indicted alongside Ruth V. Katz, his wife. The couple fled the US before a plea hearing. They had been accused of “flipping” properties to take out mortgages with inflated values, according to legal documents seen by the Financial Times. Court filings show the warrants have not been dismissed.
Telit’s board will appoint three additional independent non-executive directors as soon as possible, one of whom will become Chairman.
“The Board is now moving on from this difficult situation and will continue to deliver on its stated strategy under the interim leadership of Yosi Fait,” the company says. “He will be conducting a preliminary review of the Group’s activities and cost base.”