Yokneam-based laser technologies company Lumenis (OTCBB:LUME), is to be delisted from stock markets in the US following a settlement with regulatory authorities. The company previously announced the agreement in principle with the US Securities and Exchange Commission (SEC)'s Division of Enforcement on March 7, 2006.
The company’s statement, released yesterday said that under the settlement approved by the SEC, Lumenis consented, without admitting or denying the allegations made by the SEC, to the entry of a permanent civil injunction against future violations of the antifraud, reporting, books and records, and internal control provisions of the federal securities laws and related SEC rules. Lumenis will also be required to continue its cooperation with the SEC's ongoing investigation of others. No fines were imposed on Lumenis under the settlement but the company will be delisted, ten years after it first floated on Nasdaq.
Lumenis stated in its announcement that it intends to file to begin the re-registration process in the second quarter of 2007, in a year’s time. The question is whether Lumenis will continue operating under its present structure during the next twelve months or initiate a takeover by another company. It was believed several weeks ago that the company could be a target for acquisition by businessmen such as Meir Shamir and Gershon Zelkind. The settlement reached with the SEC related to alleged violations of SEC regulations, including erroneous recording of certain transactions during 2002-2003.
Lumenis president and CEO Avner Raz said, “"With the SEC's approval of the settlement agreement, we can now put these matters behind us and focus completely on our customers and the future, with a solid state-of-the-art portfolio of products and technologies.” Lumenis is currently traded at a miniscule value of $47 million and following yesterday’s announcement its stock dropped a further 10%, which means it has halved in value since the initial announcement of the delisting.
Yesterday’s announcement revealed that the civil complaint filed by the SEC included Lumenis’s former COO. The individual in question is none other than Sagi Genger, son of the current deputy chairman Arie Genger. Sagi Genger first as CFO from November 1999 through July 2001 and was then appointed COO, a post he held until the end of June 2003. Lumenis’s statement that the SEC had agreed a settlement with Genger but did not disclose any details.
The statement added that a complaint has also been filed against another company officer who also served as CFO and is currently marketing and business development senior VP. The individual, Kevin Morano has advised the company that he intends to contest the case. Morano joined Lumenis in March 2002 and was appointed to his present post in May 2004.
Published by Globes [online], Israel business news - www.globes.co.il - on April 27, 2006
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