Israel Securities Authority Intervenes in Next Gen Financial Reporting

Israel's Securities Authority has intervened, compelling the company Next Gen, led by CEO Harel Hershtik and Chairman Yaakov Amidror, to disclose the circumstances surrounding the resignation of its CFO, Dan Hilerovitz. The initial report of Hilerovitz's departure five days prior lacked any explanation, prompting the authority's action.

It has now emerged that Hilerovitz resigned due to allegations that Next Gen obstructed his access to crucial information and documentation regarding company account activities, hindering his ability to perform his duties. In response, Hershtik, speaking for the company, countered that Hilerovitz rushed his resignation before being summoned for a pre-termination hearing due to alleged problematic conduct.

Hershtik, a figure with a past conviction for murder, served 25 years in prison before his release. Amidror, a former National Security Advisor, testified in support of Hershtik's early release. This situation echoes earlier attempts by Hershtik to merge his biotech firm, Cent-Tech, into Next Gen, which ultimately failed, leading to a significant stock value decline.

Next Gen, previously classified as a "shell company," was suspended from trading in May for failing to submit its 2025 financial reports on time. The company's initial report on Hilerovitz's resignation stated it involved no circumstances requiring disclosure to security holders. However, following the Securities Authority's inquiry, Next Gen was compelled to issue a correction detailing Hilerovitz's claims of being denied necessary information and documentation for company account activities, which he argued prevented him from fulfilling his professional and regulatory obligations.

Hershtik's response, filed as a company report, vehemently denied Hilerovitz's claims, characterizing them as an attempt to create a false impression. He asserted that Hilerovitz resigned hastily after being informed of an impending termination hearing due to prolonged absence, questionable payment demands, and suspected leaks of internal information to a third party with conflicting interests.

These allegations against Hershtik and Amidror at Next Gen are compounded by similar accusations from former CFOs and shareholders at another company they lead, Exillion. Exillion also faced trading suspension for late financial reports. Shareholders in Exillion have petitioned the court to convene a special meeting to replace the board, citing serious deficiencies in corporate governance and financial conduct under Hershtik's leadership, referencing both Exillion's and Next Gen's issues.