OSS Chief Convicted of Fraud
While court cases involving former executives from the likes of MCI (Nasdaq: WCOEQ, MCWEQ) roll on in the U.S. (see Ebbers Gets Brief Reprieve), the lesser-known trial of Shlomo Eisenberg, chairman of OSS vendor TTI Telecom International Ltd. (Nasdaq: TTIL), has reached a dramatic conclusion. He's been found guilty of fraud (see TTI Chairman Sentenced).
Eisenberg has been sentenced to 18 months in jail, given an 18-month suspended sentence, and fined 1 million Israeli shekels (about US$223,000), for fraud related to a 1997 shareholder meeting at Arad Investments and Industrial Development Ltd., the parent company of TTI's majority shareholder, Team Computers and Systems Ltd. The fraud, which involved Eisenberg "obtaining consents through fraudulent means and misstatements or omissions in shareholder communications and a prospectus" was unrelated to TTI matters. Basically, Eisenberg misled the Arad board into voting for a deal with another company that he owned.
The TTI chairman now has 45 days to appeal. But even if he ends up behind bars, that doesn't mean he won't still be TTI chairman. A TTI spokesman says that, while TTI is located in Israel, it trades as a U.S. company. So a conviction in Israel wouldn't necessarily disqualify him from his current role at TTI. The spokesman adds that TTI will decide what course of action to take once the result of Eisenberg's appeal is known.
TTI's share price is up 1 cent at $5.71 from yesterday's closing price. Its 12-month high is $6.65, its low $4.17.
— Ray Le Maistre, International Editor, Boardwatch