Following the collapse of a balcony in one of the company's buildings in Hadera, Gindi Investments notified the Tel Aviv Stock exchange this morning that it had received 36 requests to cancel purchases of apartments in the adjacent building. As "Globes" reported last week, there is concern that there may be a risk of a similar collapse in that building too. The contractor on the project is Ortam Sahar.
"In the opinion of the company's legal counsel, and on the basis of checks carried out so far, among others by David Israel, deputy and acting chairman of the Israel Engineering Association for Construction and Infrastructure, according to which the cause of the collapse of the balcony was a failure resulting from construction that did not match the design, and faulty installation, and on the basis of the initial recommendations of the consultants for remedying the faults, it would appear that the occupants do not have the right to cancel the agreements in question," the company's statement said.
The company has already recognized the sales revenue from the 36 apartments sold, to the tune of NIS 33.1 million, and a gross profit of NIS 3.88 million, in its financial statements for the third quarter of 2013. Since the purchasers may succeed in cancelling the transactions, Gindi warns that it "is examining the effect (if any) of the said event on its financial statements for the fourth quarter of 2013, and its ability to obtain reimbursement from the contractor for direct and indirect damage it is liable to incur, and will report again as required."
Gindi states in the notice to the stock exchange that it has requested Ortam Sahar to repair the faults immediately, and has made available to the occupants alternative accommodation and all the assistance they require. It also states that Ortam Sahar had insured the project and that it had undertaken to take out product liability insurance of up to NIS 10 million and professional liability insurance of up to NIS 4 million.
Published by Globes [online], Israel business news - www.globes-online.com - on December 30, 2013
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