AIM-listed Telit Communications has dismissed its chief executive, Oozi Cats, following the revelation that he had faced criminal charges and was on run from the US authorities. Yosi Fait, the financial director was appointed as interim chief executive.

Following investigations by media outlets, including the financial blog ShareProphets it was suggested that Oozi Cats and his wife Ruth Cats were in fact Uzi Katz and Ruth Katz who escaped Boston in 1991 after they faced fraud charges. This led the company to appoint solicitors to conduct their own inquiry.

The solicitors found that the allegations were true and an indictment had been issued against Cats in the US and this fact was knowingly withheld from advisers. The company stated that, “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.”

Telit’s share price has fallen sharply on the news of the dismissal however its management has said it is now taking steps to strengthen its governance and to ensure the viability of the company. Telit announced it intended to appoint three additional independent non-executive directors as soon as practicable, one of whom will become chairman. It is expected that the non-executive appointments will be UK based and have previous PLC Board experience. Telit’s nominations committee has appointed Korn Ferry to conduct the search for these non-executive directors.

The internet technology company also stated that: “The board had engaged with its major stakeholders over the last week and is confident in the strategic and operational strength of the business. The Board reiterates the guidance it gave to the market on 7 August 2017 and intends to make a further announcement on progress during the course of September 2017.

“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. He will be conducting a preliminary review of the Group’s activities and cost base.”

The governance of AIM-listed companies has come under criticism in recent years. Manifest reported earlier this month that another AIM-listed stock, the Real Food Company admitted it had not disclosed previous payments made to directors. The London Stock Exchange is now consulting on whether governance needs to be strengthened at AIM-listed companies including if a reinforced governance code needs to be adopted. Currently AIM-listed companies are encouraged to comply with the corporate governance guide developed by the Quoted Companies Alliance.

Last Updated: 19 August 2017