A Swedish shareholder of an Israeli company trusted the other shareholder, who was an Israeli. When the company was in distress, the Israeli shareholder sought investment in the company while diluting the Swedish shareholder and finally had the Swedish sign a waiver of rights in the company while withholding material information from him.
The Court accepted the claim and held that the exploitation by the Israeli shareholder of the complete trust of the foreign shareholder in him and withholding material information from the foreign shareholder is a fraud and unconscionability, even if the Swedish shareholder was negligent by not thoroughly reviewing the facts prior to agreeing to the dilution and executing the waiver. This is also an oppression of the minority and therefore the Court appointed an expert to estimate the value of shares prior to the oppressing actions and the oppressing shareholder will be required to then pay fair value for the shares.