Bio-Nexus Founder Fights Back: It is the International Investment Fund that brought about our Collapse
In response to the Springtide Fund's claim for theft and forgery, the founder of cyber-medical company Ztiki Korland Fuchs claims that the fund has lost its entire investment in Bio-Nexus by its own hands.
Matan Barnir 31/3/20
Is Czech billionaire Karel Komárek, ranked fourth in the Czech Republic's richest list and included in Forbes' list of world's richest 1,000 people, be dragged into one of the most intriguing conflicts currently underway in Israeli Courts?
Komárek, which was valued at $ 3.1 billion in 2019, is the owner of KKCG - the largest holding company in the Czech Republic and owner of the international investment fund Springtide. In recent years, Springtide has invested about ILS 35 million in the Israeli medical institutions cyber company Bio-Nexus, founded by Ztiki Kurland-Fuchs.
In the past year, Bio-Nexus has been in turmoil. The company's cash reserves thinned, and soon it also went into liquidation proceedings, and a number of legal proceedings were filed against it, in Israel and abroad.
But the most significant effect of Bio-Nexus's deteriorating state is undoubtedly the conflict that soon ensued between Springtide and its officers and Fuchs. The conflict surfaced with very harsh accusations that the Czech fund had made against Fuchs. This is part of a lawsuit filed three months ago with the Economic Department in the Tel Aviv District Court.
In a claim at the amount of ILS 17 million filed by the Czech fund, it contended that Fuchs, Bio-Nexus and other entities had defrauded it and led it to invest millions in the company on the basis of false documents of unprecedented scale. The Czechs did not spare any accusations against Fuchs, contending to have carried out a "sting operation", and even called him "a sophisticated and fearless crook who by false pretenses solicited the fund".
By the services of attorney Doron Afik, Fuchs has now chosen to respond to the contentions with his own attack, seeking to bring additional defendants into the lawsuit filed against him. In addition to Karl Komárek, Fuchs also seeks to add two directors who actually managed Springtide's operations - Marek Jablonský and Michal Tománek. He contends that Springtide is the one who led to the collapse of Bio-Nexus.
Adv. Doron Afik / Photo: P.R.
Failure of Recovery
In a motion that Judge Ruth Ronen will need to decide upon, Fuchs contends that Springtide concealed in the lawsuit that many details, which had such been disclosed would have revealed a completely different picture than the one in the lawsuit. According to Fuchs, Springtide "did everything in its power to suppress efforts to rehabilitate Bio-nexus and to bring by its own hands to loss of its entire investment in Bio-Nexus in order to deliberately inflate its damage. Springtide has a 100 percent contributory fault to any damage caused to it."
Fuchs also contends that, if any false representations were made to the Czechs, the finger should be pointed to Philippe Metoudi, who served as chairman of Bio-Nexus and brokered a number of investment deals between the company and foreign investors. Metoudi, Fuchs, also contends, was the living spirit and the one responsible for the representations that were made in preparation for Springtide's investment in Bio-Nexus. As an aside, Metoudi also filed a lawsuit against Fuchs last summer, in the amount of ILS 2 million.
Fuchs contends that Komárek and the directors of Springtide cannot claim that they did not know what they were entering into when investing in Bio-Nexus, because "they decided to invest in Bio-Nexus based on Metoudi's representations, knowing full well the company's financial situation, after 14 months of due diligence review".
Furthermore, Fuchs contents, the same counterfeit documents claimed in the lawsuit are purely simulations of financial statements sought by Springtide itself. "In meetings and talks with Fuchs, Jablonský reiterated his demand for him to produce 'optimistic' forecasts of Bio-Nexus which purpose, he stated, was internally to show within the KKCG group Bio-Nexus as a high-potential investment," Fuchs claims, adding: “Whether such representations were only internal in the group and are now used in the false lawsuit against Fuchs, after the collapse of Bio-Nexus, or also presented to outside entities? This is unknown, but surely if these representations were used to extract money from third parties, this is a subject for examination by the enforcement authorities in the Czech Republic. "
A pig in a poke
Fuchs also refers in the motion to the Czechs contention that he presented them with fake documents that persuaded them to make another transaction with Bio-Nexus, under which shares of Cleerio s.r.o. company owned by KKCG were sold to Bio-Nexus. Fuchs claims that not only was this not a fraud on his part, but he was the one who fell victim to the scam when they sold him a "pig in poke." According to him, this deal actually saved the Czechs from great embarrassment, and was mainly done "to prevent Karel Komárek's reputation being damaged by the closing down of a failed company owned by them and firing employees."
Thus, Fuchs claims, "Komárek, Jablonský and Tománek defrauded Bio Nexus in misrepresentations which showed that Cleerio had a million Euro cash flow, but in retrospect it became clear that such did not exist, and their entire intention was to sell Cleerio to Bio-Nexus in order to avoid the loss of € 2.5 million - the amount of the KKCG group's investment in the same company - and burdening costs of € 1 million a year on Bio-Nexus (instead of the Springtide fund being forced to bear such), which in turn caused the collapse of Bio-Nexus."
Attorneys Navot Tel-Zur, Tal Shapira and Niv Varnish on Springtide's behalf responded: "This is a baseless motion without factual or legal basis, which is just another desperate step on the part of defendants, Mr. Ztiki Fuchs and Shiri Yadai, who are sued by Springtide for a total of ILS 17 million for fraud and misrepresentations, while the District Court has already considered it appropriate to foreclose on defendants' assets and order legal expenses, with all that is implied. "
We note that Fuchs's choice to raise his claims against Komárek and the directors at Springtide as part of a motion to add defendants is not self-evident. While Fuchs mentions past caselaw that supports his course of action, it is clear that it is a creative and unconventional way to make claims that the appropriate place for them is in a counterclaim or third party notice. Fuchs's gain from the move, if successful, is in saving the Court fee that would have been hundreds of thousand of Shekels for an third party notice or counterclaim, while in this case the motion filed by Fuchs entails Court fees of about ILS 30 only.