A few weeks after the company reported a heavy loss for 2014, the dismissal of its CEO and suspicions of financial irregularities, it emerged today that the troubles at Africa-Israel Investments Ltd. (TASE:AFIL) unit Africa Israel Industries are much worse than first thought.
The company reported today that there had been a long period of financial, accounting and management chaos. The financial hole that it now estimates is much deeper than it initially supposed. The cost is expected to amount to NIS 49-59 million, compared with a write-down of just NIS 14 million that the company projected last month.
Africa Israel Industries reported severe accusations against former CEO Avi Motola, who was dismissed last month. "Claims and documentary evidence of unlawful actions by Motola, former CEO of the company and of its subsidiary Negev Ceramics, have come to the company's notice, chiefly involving unlawfully taking money from companies in the Negev group without approval and without reporting it to the authorized parties, and/or unlawful personal use of the companies' money without approval and without reporting to the authorized parties," Africa Israel Industries' notification said.
Motola's lawyer said in response that his client had been asked to answer a series of questions by the company, and had answered all of them.
Africa Israel Industries says that the findings of its investigations indicate that other senior managers at Negev Ceramics knew of the affair or were involved in it, and that it had been decided to hold hearings and to examine the termination of their employment.
Published by Globes [online], Israel business news - www.globes-online.com - on April 30, 2015
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