If you've been following

Rogosin Enterprise's (TASE:

ROGO

) announcements to the Tel Aviv Stock Exchange this week, you may be confused.

The week began with the bizarre resignation of its chairman and controlling shareholder, Yochai Schneider. It went on with an urgent announcement that the candidate to replace Schneider as chairman was Amos Mar Haim, the acting chairman. And today, the company has announced the appointment of Yosef Adulmi to the chair.

To recap, Schneider quit after refusing to sign the company's financial statements for the second quarter of 2002, claiming he hadn't been on the board, or at the company, during the period in question.

During that time, Rogosin had been managed by its controlling shareholder, Ezra Harel. Apparently, in his recent due diligence inspections Schneider uncovered details that made him think twice about lending his name to the company's official statements.

Now, Schneider did not quit the board, merely his position as chairman, on the grounds that it is incumbent upon the chairman to sign a company's financial statements. He thought to devolve the task onto Mar Haim, who agreed to sign the documents.

But something went down in the last three days that evidently led Mar Haim, or Rogosin, to think thrice about his leading the board. As TheMarker noted previously, Mar Haim is a well-known figure who was convicted of NIS 2 million worth of tax fraud in the mid-1990s, and who was sentenced to community service.

Moreover, during the 1990s Mar Haim served as a director for the JOEL-Passport oil exploration group, controlled by Joe Elmaliach, an old buddy of his. The company's prospectus shows that Mar Haim received $4,000 a month for consulting services of a nature never disclosed. JOEL-Passport managed to raise tens of millions of shekels from investors, and Mar Haim, as its director, gave his okay to creamy salaries for the company's managers throughout his five years on its board.

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Rogosin's decision-makers surely knew Mar Haim's history, which evidently didn't affect their desire to name him chairman of their board. Yet today we learn that the board chose Adulmi, not Mar Haim.

In its financial statements published today, Rogosin explains why Schneider declined to sign them. While still under Harel's management in the second quarter, its revenues declined to NIS 52,000 (something just over $10,000), and its quarterly loss shot up to NIS 14.3 million.

How did it manage to lose NIS 14.3 million? Well, it write down the value of investment by NIS 4.5 million, and there were heavy financing costs, of NIS 6.6 million, compared with NIS 0.78 million in the parallel quarter of last year. Those were the main factors behind the swelling loss.

But what probably irks investors much, much more is the NIS 2.2 million bill for management and general costs.

How does a company with quarterly revenues of NIS 52,000 manage to generate management and general costs of NIS 2.2 million?

If you've been keeping an eye on Ezra Harel over the years, then you might have expected that kind of ratio.

In 1999, Rogosin's revenues were NIS 703,000 and its management and general costs were NIS 6.8 million.

In 2000, revenues climbed to NIS 1.8 million, and its management and general costs rose to NIS 7.4 million.

Come 2001, Rogosin's revenues sank to NIS 332,000 while its management and general costs rocketed to NIS 9.6 million.

Now, in 2002, with receivership looming large and black over the company, its management and general costs for the first half have reached NIS 4.6 million.

Why the company has no money to make good on its commitments to bond-holders, while paying its managers so lavishly that question will have to be answered by its new chairman, who agreed to sign his name to the company's financial statements.