Food Company Faces Major Profit Hit Over Inventory Reporting Irregularities

Tomer Food, an Israeli food import and marketing company, is set to revise its financial reports after an internal audit committee discovered irregularities in how its inventory was presented. The company's controlling shareholder and CEO, Doron Kimlov, allegedly intervened in the valuation of inventory, necessitating a restatement of its financial results.

An independent consulting firm, Pahn Kana, hired to investigate the inventory issue, found discrepancies between the figures reported by Tomer Food and those that should have been reflected in its financial statements. The audit committee's findings suggest that Kimlov, who also serves as chairman of the board, influenced the inventory valuation.

As a result of these findings, Tomer Food anticipates a negative impact of NIS 2-3 million on its equity and annual profit. This adjustment is expected to erase most of the company's previous annual profit, which stood at approximately NIS 3 million last year. The company recently joined the stock exchange after merging with a SPAC, and is currently valued at NIS 138 million.

In response to the situation, the company announced the appointment of Guy Freeman as its new CFO and deputy CEO, pending approval of the revised financial statements. Freeman, who has over two decades of experience in senior financial roles, previously served as CFO for Ten gas stations and deputy CEO and CFO for Cham Food. The company stated its commitment to a thorough investigation and to strengthening its internal control mechanisms.

The irregularities came to light after the company's former CFO, Avital Perlstein-Cherny, resigned last month citing concerns over the handling of inventory in previous years, prompting an immediate internal review.