A lawsuit filed today with the Tel Aviv District Court against Israel Corporation (TASE: ILCO), controlled by Idan Ofer, claims that the company could have saved $33.5 million by not making its last investment in electric car venture Better Place. The lawsuit was filed before any derivative lawsuit has been filed against the company.
Better Place crashed last year, with the motion for liquidation filed in May 2013. The liquidation meant that Israel Corp.'s $293 million investment in the venture went down the drain.
The motion for the disclosure of documents filed by Israel Corp. shareholders, Boaz Yifat, CPA, asks the court to order the company to disclose all its investment documents in Better Place, all Better Place reports and data in Israel Corp.'s position before the decision to invest $33.5 million in the venture, and all the minutes and decisions by Israel Corp.'s board of directors, audit committee, and management related to this investment.
The motion states that the motion is intended to clarify Israel Corp.'s investment in Better Place in February 2013. It says that, on October 31, 2012, and November 1, 2012, Israel Corp. made immediate notifications to the TASE stating that it promised to invest $67 million in Better Place, out of a total investment of $100 million, in two tranches, and invested $33.5 million shortly after signing the investment agreement. The petitioner asks why Israel Corp. made the second payment, just 24 days before publishing its financial report for 2012, which stated that there were serious doubts about Better Place's ability to continue as a going concern.
The petition states that if Israel Corp. was unaware of Better Place's shape at the time of the second tranche, the petitioner wants to know whether the company was misled, and if Israel Corp. knew that it could not save Better Place, why did it make the investment, "throwing good money after bad."
Published by Globes [online], Israel business news - www.globes-online.com - on April 27, 2014
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