Telit Communications: how investors were scalded by Cats

There’s nothing like a jolly Aim scandal to liven up the dog days of August. Here’s a “simply bizarre” one, said Nils Pratley in The Guardian. In a tale worthy of T.S. Eliot’s Old Possum’s Book of Practical Cats (“a cat must have three different names”), the boss of the racy tech company Telit, one Oozi Cats, has resigned after allegedly being unmasked as the international fugitive Uzi Katz – a “property flipper” from Boston who, along with his wife, Ruth, has been on the run from US justice since their indictment for mortgage-related wire fraud in 1992. Shares in Telit – a specialist in the hot “internet of things” sector that counts electric carmaker Tesla as a customer – crashed by more than half on news of the investigation, said Iain Withers in The Daily Telegraph. Scalded investors will doubtless note that Cats himself raised more than £24m from a share sale in May, reportedly to pay off personal debts in the US. Short sellers were probably responsible for the “engaging dossier” that eventually “outed Oozi”, said Alistair Osborne in The Times. Fellow board directors, all appointed by Cats, were “far too close to the man” to question either him or “his missus”, latterly the “art curator” of Telit’s “Uffizi-style collection”. Successive nominated advisors (“nomads”) also failed to spot anything wrong.

“Slippery creatures, cats,” said Lex in the Financial Times. But then, London’s junior market has always had “some pretty louche inhabitants”. Critics will argue that these shenanigans are further evidence that Aim needs tighter regulation. Cooler cats might conclude that “sporadic blow-ups” are inevitable in a market “which makes start-ups more available to investors”. Either way, the lesson here for investors is encapsulated in the old Scottish motto: “Touch not the cat but [meaning without] a glove.”