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Reports have emerged in the Israeli business press that senior executives at MX1 (the former RR Media) have been accused of allegedly “swindling…and acting utterly illegally and in complete violation of agreements they signed” when the business was acquired by satellite operator SES.
The then NASDAQ-listed RR Media was acquired by SES in 2016 (the deal wrapped last July) with SES paying $242 million in cash for the Israel-based business, which was then combined with SES Platform Services and renamed MX1. SES paid a premium of 52 per cent over the NASDAQ price of RR Media’s shares.
A lawsuit has now been filed by local lawyers against former MX1 executives, including CFO Shmuel Koren, global sales manager Shalom Izkovitz, and Europe and Middle East sales manager Rami Goldberg.
The trio were paid special bonuses and share options as part of the purchase.
However, the lawsuit’s statement of claim – apparently seen by business publication Globes – alleges that the trio conspired to establish a competing business. It is alleged the three “had transferred (or had begun to transfer) the company’s customers to the competing company they had founded, they resigned from their jobs, and continued doing business for the competitor (in violation of the agreements they had signed), and solicited customers to switch to their company, thereby causing damage to MX1”.
The lawsuit was filed on December 25th and seeks NIS60 million (about $15 million) in damages. SES declined to comment on what it described as ongoing litigation.