6 billion dollar law suit against ImageSat
Number of Israeli shareholders say satellite company violated contracts with Venezuela, Angola, due to pressure on Israeli government by the US
A six billion dollar lawsuit was brought against the satellite company ImageSat International by a number of minority shareholders last weekend, on the claim that the company's behavior in recent years had caused them substantial financial losses.
Plaintiffs claimed that since 2000, the State of Israel, folding to United States pressure, urged the company to cancel certain contracts for political reasons.
For example, following Venezuelan president Hugo Chavez' increased contact with Tehran, ImageSat reneged on a contract meant to supply the company with $18 million annual revenues. Similar cases of contract violation occurred concerning deals with Angola, Russia and Taiwan, causing the loss of millions of dollars in potential revenues.
Israeli sources explained that, when Chavez tried to purchase photographs taken by Israeli spy satellites, and when he failed to do so, attempted to acquire significant shares of ImageSat itself.
The sources explained that there has been an ongoing struggle for the past several years between minority and majority shareholders in the company regarding the question of who is entitled to buy satellite photographs from the company.
The plaintiffs in the suit submitted that, by violating terms of these contracts, ImageSat violated its obligations to shareholders, many of whom suffered financial losses as a result of such behavior.
Lawsuit
The claim, filed in the United States with the New York Southern District Court, was also directed against Israel Aerospace Industries Ltd. (IAI) and Elbit Systems – both large shareholders in the company.
IAI holds approximately 46 percent of ImageSat's issued share capital. A subsidiary of Elbit Systems holds approximately14 percent of ImageSat's issued share capital and is entitled to nominate one director to ImageSat's board.
Individual defendants include ImageSat CEO Menashe Broder, former Ministry of Defense Director-General Jacob Toren, former and current IAI President/CEOs Moshe Keret and Itzhak Nissan, Elbit Systems Chairman Michael Federmann, Elbit CEO Joseph Ackerman, and Elbit CFO Joseph Gaspar.
Among the plaintiffs is Israeli Dr. Moshe Bar-Lev, a former president of ImageSat. Another is Haim Yifrach, the former IDF Chief Intelligence Officer, who served as the satellite company's Vice President for Defense Systems.
According to a press release by Elbit Systems last week, the company said that there is no merit to the allegations made against it.
Arieh Egozi contributed to this report
