B.S.D. Crown Ltd Company Update: Meinl Bank Deposit

 
TIDMBSD 
 
BSD Crown Ltd. (the "Company") 
 
                                   (LSE: BSD) 
 
                      Company Update: Meinl Bank Deposit 
 
                                                        Ramat Gan, 20 June 2017 
 
Further to the announcement dated 17 May 2016, the Company hereby updates the 
market on recent developments in relation to the cash amounts (the "Deposit") 
of approximately US$30 million deposited by the Company with Meinl Bank ("Meinl 
") in Austria in 2013. 
 
The Company has received a notification from Meinl claiming that certain events 
of default have occurred under the pledge agreement allegedly signed between 
the Company and Meinl and therefore, under Section 7.01 of such pledge 
agreement, the collateral posted in a pledged account for the purpose of 
settling certain obligations of Terminus Ventures Limited ("Terminus") under a 
loan agreement between Terminus and the Company has now become due and payable 
pursuant to such loan agreement. Consequently, Meinl reserves its rights 
against the Company, secured by a pledge over the Company's deposit of US$30 
million held in Meinl (the "Company's Deposit"). In addition, Meinl has 
requested from the Company to increase the pledged deposit for an additional 
amount of EUR 1,110,212 related to alleged unpaid margins. 
 
The Company denies any and all claims of Meinl. Without prejudice to any 
rights, and as stated in the announcement referenced above, the Company has 
never agreed to use the Deposit as collateral or as a guarantee in favor of any 
third party. Furthermore, the Company possesses certain documents that indicate 
that the Deposit is held in Meinl on behalf of the Company, free and clear of 
any encumbrance. 
 
The Company will continue to seek the return of the Deposit and has instructed 
its legal advisors to act, on its behalf, in order to explore and pursue all 
courses of action and  rights regarding the Deposit. 
 
Furthermore, the Company herby announces that on 18 June 2017, the Tel-Aviv 
District Attorney's Office (Taxation and Economics) notified Mr. Gregory 
Gortovoy, the former controlling shareholder and chairman of the Company's 
board of directors, that it is considering filing an indictment against him, 
subject to a hearing, based, inter alia, on suspicions of theft by authorized 
personnel, money laundering, fraud, breach of fiduciary duties and 
falsification of corporate registrations. According to the notification, as of 
July 2015, Gortovoy has used his position as controlling shareholder and 
chairman of the board of directors of the Company to conceal the fact that the 
aforementioned deposits were allegedly pledged in favor of loans given to banks 
in connection with loans provided by the banks to companies related to 
Gortovoy. 
 
Enquiries: Joseph Williger, Active Chairman of the Board [e-mail] 
 
 
 
END 
 

(END) Dow Jones Newswires

June 20, 2017 07:44 ET (11:44 GMT)