Summer high-tech scandal keeps Israel amused

July 9, 2009 - 1:31 PM by Nicky

Israel is agog. This week we’ve watched the best high-tech scandal to unfold since Kobi Alexander ran off to Namibia.

It all began at the start of the week when an Israeli newspaper broke a story about Bnei Brak company, Life Keeper, which has developed a heart monitor patch, selling a 37 percent stake in the company to a Taiwanese computer hardware manufacturer for $370 million, at a company value of $1 billion.

Someone's not telling the truth.

In these recessionary days, journalists across the country leapt on the story. Israeli company makes good – we just love that kind of story here. There were a few puzzling things, however. Number one of which was why no one had actually heard of this company before, especially given that it was developing such cool technology – the patch apparently could forecast when you were going to have a heart attack and send your location to a doctor.

The next day the doubts began. Israel’s financial daily, Globes carried out a bit of uncharacteristic investigative reporting into the sale and discovered that the Taiwanese company, Micro-Star International (MSI), hadn’t actually reported the deal, while its London office claimed it didn’t know a thing about it.

Not so, said SafeSky CEO, Dr. Gabi Picker. “The deal is valid and alive,” he told Globes. “We hold an MOU signed by a notary by both sides from Seligman & Co. law firm that accompanied the negotiations. They have a copy of the document.”

Globes also pointed out that none of Israel’s VC funds had heard of SafeSky – the company’s parent company, and nor had any of Israel’s leading doctors.

The next day Ha’aretz waded in, pointing out that the Hadassah Medical Center in Jerusalem – supposedly conducting clinical trials for the device – had no connection to the company or the patch.

Picker, who joined SafeSky just a few weeks ago, also seemed to be getting cold feet, hinting that company director Hagai Hadas – a former Mossad man who had encouraged him to join the firm – for the mess. Ha’aretz said Picker told confidantes that he wasn’t entirely sure that either the product or the deal were real.

Doubts also surfaced about Aharon (Arik) Klein, supposedly the inventor of the patch technology. Turns out he’s serial con man who has numerous debts and various prison sentences for fraud. Even the police in Cyprus are hunting for him.

Now the latest news in the saga is that Picker has resigned. His resignation comes after a lawyer at Seligman & Co. refused to give Picker’s attorney a copy of the document about the transaction.

So what comes next? We’ll just have to wait and see. Ah. There’s nothing like a good scandal to keep you going through the slow, scorching days of summer. Far better than stories about aliens and crop circles.

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