The two co-founders of an Israeli high-tech company, who led the board of directors by the nose in the ten years since its IPO, will, at the end of December, find themselves facing a board of mostly American directors, who, not to put too fine a point on it, do not exactly like the co-founders, because of the company's past performance. We are talking about the takeover by investor Jerry Ivy of the board of OTI - On Track Innovations Ltd. (Nasdaq: OTIV; DAX: OT5), founded by chairman and CEO Oded Bashan and VP projects Ronnie Gilboa, which happened faster than I expected.
After OTI's general shareholders meeting rejected Bashan's three Israeli nominees to the board earlier this month, the two American directors whom he had previously appointed also resigned last week. Under pressure from Ivy, who owns 10% of the company, and who has the support of shareholders with large stakes in it, Bashan was compelled to summon a special general meeting for December 30.
The summons states that the meeting's agenda includes cancelling the appointment of Israeli director Eli Akavia, and the appointment of at least six Americans from Ivy's list of nominees. If passed, the result will be a new OTI board of directors comprising three Israelis, including Bashan and Gilboa, who face six Americans, who will quickly navigate the company toward fulfilling its potential - which it has.
By the way, I added OTI to the portfolio because of the potential of its scores of patents, some of which are in the hot field of electronic wallets in smartphones, and specifically because of the company's patent infringement litigation filed against US carrier giant T-Mobile Inc. OTI's new, mostly American, board of directors, will probably be better able to leverage this lawsuit better from the US than from Rosh Pina.