"These two foreign companies transferred the 50 percent they had to Milmus, we were told." (Page 17 of the minutes of March 25, 2002)
It will appear later that Cohen does not deny that he was well aware of the transfer of the shares to Milmus, but rather claims that he or the company did not approve the transfer of the shares as required by the company's articles of association, and in any case Milmus was not registered in the shareholders' register, and in addition, in any case there is no register of shareholders in the company.
- When this situation was created and each party was involved, in November 1997 a mechanism set forth in the company's articles of association was activated, and a "decisive shareholder" was appointed – the Honorable Judge (retired) Ali Natan. The composition of the board of directors therefore included representatives of Milmus (or representatives of the foreign companies) – Gutman and Lahav. At a later stage, Mr. Boaz Ben-Haim joined the meeting of the Board of Directors in place of Mr. Lahav, and in October 2000 the representatives were Mrs. Eti Levy and Mr. Amnon Eisenberg.
The respondents claim that the replacement of the representatives (or directors) as aforesaid, was made with the reservations of the directors on behalf of Cohen, namely:
"Counsel for the parties agree that the participation of Mr. Boaz Ben-Haim and his votes do not prejudice their legal arguments regarding Milammus's status in the company" (Minutes of the Company's Board of Directors of June 11, 1998).
This was also the case when Levy and Eisenberg replaced their predecessors on behalf of Milmus. Respondent No. 4, as a director on behalf of Cohen, was careful to declare on the basis of legal advice that the appointment of the directors by Milamus was "improper and invalid", and that Milamus was not entitled to appoint directors in the company, and that their sitting on the company's board of directors was only "as representatives on behalf of Milamus" (minutes of the board of directors of 6/10/2000)
- The respondents did not dispute that Milmus purchased the shares from the foreign companies, and at a certain point even accepted Milmus's representatives as befits new partners in the ownership of the hotel and equal partners in the company's shares. This was the case at the meeting of the board of directors on September 6, 2000.
However, we will return to the meeting of the company's board of directors held on August 3, 1997, in which representatives of Milmus - Gutman and Lahav participated. At this meeting, in which the respondents' lawyer was present, Cohen raised the issue of approving the transfer of the shares to Milmus. Milmus's representatives requested, according to Milmus, not to hold the hearing without the presence of their lawyers, while Cohen's lawyer was present at the meeting. However, the directors on behalf of Cohen did not heed this, and the representatives of Milmus left the meeting.