Food Importer Tomer Mazon Investigates Inventory Irregularities, CEO Under Scrutiny

An internal review at Israeli food importer Tomer Mazon has uncovered discrepancies in the handling of inventory within its subsidiary, with findings suggesting potential involvement of the controlling shareholder, Doron Kimelov, who serves as both Chairman and CEO, in setting inventory values. The company has appointed Guy Freeman as its new CFO and Deputy CEO. The ongoing investigation has revealed gaps between the cost data held by the subsidiary, Tomer Import Food, and the figures reported in past financial statements, which may necessitate a restatement of these reports. Evidence reportedly indicates that Kimelov, directly and through subordinates, influenced the determination of these inventory values.

In response to these findings, the company's Audit Committee has made and is expected to make further decisions to strengthen oversight and internal controls, including clarifying authority distribution, partly through Freeman's appointment. The committee has also expanded its investigation to include revenue aspects and the disclosure of transactions with interested parties, following additional information received. These expanded checks will be conducted by an external firm from the law office of Nitzan, along with dedicated legal counsel, and will involve questioning past and present company officials.

The situation follows the resignation of former CFO Avital Cherni shortly after her appointment, citing inventory discrepancies she discovered in the company's pre-IPO financial reports. Trading in the company's stock was halted, and Tomer Mazon initiated an immediate review of its inventory management practices to quantify any existing gaps. An independent committee is being formed to examine financial reports, and the firm Fahn Kena Consultants has been appointed as an independent entity to conduct specific inventory-related investigations, with Professor Haim Asiag serving as a professional advisor to this committee.

Tomer Mazon stated in response, "The investigations are not yet complete. The company will continue to act responsibly and transparently and will report to the public on further developments and findings as required."