The internal auditor of the
Noga Electrotechnika (TASE:
) group of companies, Ilan Chaikin, resigned today on grounds that he decided should be brought to the public's attention.
Chaikin, who has served as internal auditor for both Noga Electrotechnika and its subsidiary
Noga Technologies (TASE:
), two factors led to his resignation. One was that the group didn't pay his auditing bills, and the more substantial one was conflicts of opinion with the management.
Yesterday Noga Electrotechnika obtained a stay of proceedings. During the hearings, it became apparent that the group's debts have mounted to NIS 823 million, and that the company's viability is in question. Trade in its shares has been suspended.
Chaikin says that the boards of the two Noga companies recently asked him to publish a special audit report on transactions that the controlling shareholders Itzhack Goldenberg and Eli Uzan sought to carry out, and regarding Noga Electrotechnika's cash flow.
Among other claims, Chaikin says the company failed to provide answers to questions he raised, and that conflicts arose over findings regarding the company's receivables and cash flow situation.
In any case, he says, the company's management is busy negotiating a refinancing arrangement with the banks and creditors, hence the conditions are not appropriate for a proper internal audit.
When quitting three weeks ago, external director Eli Pesach said one reason for his resignation was an interim report from Chaikin to the board, presenting a severe cash flow crunch and substantial money transfers that had not been debated or approved by the board of directors. He also noted that Chaikin's report showed the company could go broke.