Former IDF Chief Quits as CEO of Shemen

YERUSHALAYIM -

Former IDF Chief of Staff Gabi Ashkenazi announced his resignation as CEO of Shemen Oil, two weeks after the company declared that its Yam 3 well is dry, Haaretz reports.

Eyebrows were raised when Ashkenazi — who stepped down as IDF chief in 2011 after serving four years — was named Shemen CEO in November 2011, even though he had no prior experience in the industry. He was reported to be earning around $680,000 a year, along with a generous stock option package.

Shemen and its partners invested approximately $170 million in the Yam 3 well, making it the most expensive oil-exploration project in Israel’s history. Public funding covered most of the project’s cost.

Earlier this month, permission to file a $180 million class-action suit was submitted to an Israeli court. The suit seeks to prove that Shemen and its directors, including Ashkenazi, deliberately misled the public over the prospect of extracting oil from the Yam 3 well and that it deliberately withheld relevant data from investors.

According to the plaintiff, “the company published false or misleading announcements, which misled investors and created false expectations that high-quality oil would be discovered.”