Technology company censured for breaches of AIM listing rules

Out-Law News | 04 Jul 2019 | 10:37 am | 1 min. read

Technology company Telit Communications Plc breached the AIM Rules for Companies when it failed to disclose that its former chief executive had been subject to criminal investigation in the US, the London Stock Exchange (LSE) has announced..

Telit, which provides 'internet of things' (IoT) and cloud computing services, breached rules 3 and 31 of the AIM Rules for Companies, according to a disciplinary notice (3-page / 196KB PDF) published by the LSE in its role as market regulator. However, LSE has agreed to waive a £350,000 fine in full, in recognition of Telit's full cooperation with its investigation and the "particular circumstances" of the case.

LSE, in the published notice, said that the "standing" of the directors of an AIM listed company was "important information upon which a nominated adviser is required to make judgements in respect of suitability under its responsibilities owed to the Exchange".

"Withholding or not disclosing relevant information relating to directors is not an acceptable standard," it said.

AIM is a market for smaller and growing companies. Telit was admitted to the market on 4 April 2015. Its chief executive at the point of admission was Oozi Cats, who remained chief executive until 14 August 2017.

Cats, who had previously been known professionally as Uzi Katz, kept the previous spelling of his name and the details of his indictment under that name from Telit. Telit was therefore unable to provide this information to its nominated advisers or to LSE in its admission document, as required by the AIM rules.

Cats is no longer involved with Telit, while the company has since "entirely reconstituted its board", according to the LSE notice.

LSE acknowledged that the board of Telit and its advisers had faced "real difficulties ... in being able to reasonably uncover information relating to the historical indictment of its then CEO at the time of admission and thereafter". For this reason, and due to the company's cooperation with its investigation, it decided to waive the fine in full.