End of an embarrasing saga
If, as a public company, Lumenis was contemptuous of its shareholders and never asked their opinion, who knows what its management will do now.
Shlomo Greenberg
What exactly happened at Lumenis Ltd. (OTCBB:LUME) What happened was that the company told the public about the agreements in principle reached with the US Securities and Exchange Commission (SEC) Division of Enforcement on issues that led the SEC to open an investigation against the company a year ago.
The purpose of the agreements in principle, which are not binding on the SEC or the courts, are to bring an end to the investigation, once and for all, put the past behind the company, and enable to move forward with a clean slate. Since the SEC Division of Enforcement agreed in principle to Lumenis’s proposals, the agreements will probably be upheld.
Lumenis proposed to accept binding restrictions, without admitting anything. Under the proposal, no fine will be imposed on the company, which will continue to assist the SEC with whatever it asks. Lumenis will also delist its shares form trading in the US, until the SEC agrees to reregister them. The SEC may still initiate legal proceedings against two former Lumenis employees, to which the company has consented.
We can only hope that this will end Lumenis’s problems, and the company can go forth, ostensibly with clean hands, but still saddled with immense debts. Although the documents, it must be said, were filed with the SEC in early March, the company has not yet clarified what its US and Israeli shareholders will do with their liquid shares. This is the main reason why the share has plummeted, despite what appears to be an improvement in the company’s circumstances on Main Street, and rightly so. What does delisting from trading mean? It means that shareholders will own, without anyone asking their opinion, shares in a private company, rather than a public one. Who wants to be an anonymous shareholder in a private company in which he or she has no influence on developments, when previously they ostensibly had influence, but were ignored?
Of course both the expert investor and layman are selling their Lumenis shares. At least this way they’ll see a few pennies from this very embarrassing and painful saga. If, as a public company, Lumenis was contemptuous of its shareholders and never asked their opinion, who knows what its management will do now. It is very important to looked at the scorched earth Arie Genger has left behind in Israel, and make some changes for the next times.
Published by Globes [online], Israel business news - www.globes.co.il - on March 14, 2006
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