The chief of company Telit Communications, Oozi Cats, has resigned over his so-called ties to a 25-year-old fraud in Boston, indicating a fresh investigation of London’s younger market.
Mr Cats abandoned his role as chief executive in immediate effect, the company said, after an urgent study of allegations first made by an Italian publication and carried by law firm Cameron McKenna revealed he had “knowingly withheld” a US arraignment.
The charge links to a property fraud plot in Boston in the early 90s and was made towards a man called Uzi Katz – an alternate spelling of Mr Cats’ name, according to a source familiar with the firm – and his wife Ruth, according to Boston district court records seen by The Daily Telegraph. He is claimed to be a runaway from US justice.
“It is a source of considerable anger to the board that the historical indictment against Oozi Cats was never disclosed to them,” Telit said.
Cliff Weight of investors’ organization ShareSoc declared the circumstances highlighted the value of proper investigation of firms on London’s junior market.
He said: “Due diligence of AIM has yet again failed the market and shareholders.”
Telit shares were 5pc up at £1.31 as investors embraced Mr Cats’ withdrawal from his position.
The ‘internet of things’ expert had previously been taking high on investor interest for its technology that connects everyday items such as refrigerators and vehicles to the internet. It had a market value as big as £500m this year. It includes Californian electric car maker Tesla among its clients.
In May, Mr Cats sold more than 7m of his stake in the business, getting more than £24m, which is assumed to have been utilized to pay personal credits he carried out in US dollars.
Yosi Fait, the firm’s finance boss, is working as the interim chief executive. The company said it would study to select three new non-executive directors to its committee, including a new chair.
It also denied recent news doubting the firm’s financial stability.
Mr Cats and his wife Ruth could not be contacted for an explanation.