UPDATE 2-Israel high court acquits Teva CEO
September 7, 2000 07:39 AM
(Adds CEO comments paragraph 6-7; CFO comment paragraph 8)
By Tova Cohen
TEL AVIV, Sept 7 (Reuters) - Israel's Supreme Court on Thursday overturned the conviction for tax violations of Teva Pharmaceutical Industries' chief executive officer Eli Hurvitz, Teva said.
"The Supreme Court in Jerusalem announced today it accepted Eli Hurvitz's appeal and exonerated him from the charges related to him in the Promedico trial," Teva, Israel's largest drug company, said in a statement to the Tel Aviv Stock Exchange.
Teva's Tel Aviv-traded share was up 3.9 percent at 255.6 shekels at 1120 GMT in a flat market. It had been trading up over four percent in the morning.
In December 1998 Hurvitz was convicted in the Jerusalem District Court of tax violations connected with Promedico, a pharmaceuticals importer controlled by Teva from 1980 to 1986. Hurvitz was Promedico's chairman at the time.
He subsequently received an 18-month suspended jail sentence and a 700,000 shekel fine.
"I have gone through six difficult years, more difficult than can be imagined," Hurvitz told a news conference at Teva headquarters, where he was given a hero's welcome by company employees.
"The acquittal was sweeping," Hurvitz added. "This makes it easier for me."
Teva's chief financial officer Dan Suesskind attributed much of the share price rise on Thursday to Hurvitz's acquittal.
But analysts were less convinced.
"Generally, it was more of psychological hangover to this stock than a real one. Hurvitz wasn't going to jail, it was going to be a conditional sentence," said Richard Gussow, Lehman Brothers' Tel Aviv-based analyst.
Shani Kogan, an analyst at Nessuah Zannex Securities, said the Tel Aviv share was mostly following its Nasdaq-traded American depositary receipt higher.
Teva's ADR rose $1-5/8, or 2.2 percent, to $62-7/8 on Wednesday, before the Israeli high court had ruled.
"Other specialty pharmaceuticals also rose on Wednesday, half of Teva's peer group was up," Kogan said. "Investors see them as a defensive play when the market is falling."
Kogan also downplayed the impact of Hurvitz's exoneration on the share price.
"If the opposite had happened it would be negative. But the fact that he was exonerated, it's not like getting a new product," Kogan said.
($1 = 4.03 shekels)
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