The chief executive of connectivity kit designer Telit Communications (TCM:AIM) is stepping down from the board after it emerged he had previously been indicted in the US.
The shares are up 14.5% to 141.75p on hopes this could mark a turning point for the firm and reassurance on the wider state of the company.
Shares in the Internet-of-Things specialist are bouncing back yesterday after Oozi Cats resigned with immediate effect. Telit revealed an indictment against him had been ‘knowingly withheld’ from advisers at the firm.
Telit said ‘it is a source of considerable anger’ that the charge had not been disclosed and it had ‘only been made aware of its existence through third parties’.
The firm launched an investigation last week to assess whether Cats, who has led the firm since 2000, was the same Uzi Katzi who had been accused of wire fraud in Boston 1992.
It is reported that he and his wife, Ruth V. Katz, were accused of ‘flipping’ properties to take out mortgages with inflated values.
PREVIOUS SHARE PRICE COLLAPSE
The allegations come just days after Telit’s share price collapsed. Shares fell from 257.5p to 150p last week after the business slashed its dividend, cut growth targets and revealed it had plunged into the red in its half year results (7 Aug).
Yosi Fait is acting as interim chief executive officer and will conduct a review of the company’s activities and costs. The firm said it was ‘moving on from this difficult situation’ and was confident in the strategic and operation strength of the business.
Telit said it would appoint three additional non-executive directors, one of whom will become chairman. The company also dismissed speculation over its financial condition, trading performance and business relationships as having ‘no substance’. The firm said it ‘stands behind the group’s audited accounts to 31 December 2016 and the most recently published interim statement’.