Saturday 11 July 2009

A Series of Unbelievable Events

The strange story surrounds a medical patch called Life Keeper which has reputedly been developed by an Israeli company, SafeSky Software. Life Keeper shot into the news last week when it was announced that SafeSky had sold 37% of Life Keeper to British-Taiwanese company, Micro-Star International for $370m. This values Life Keeper at a cool billion dollars. But what is Life Keeper, and why should it be worth so much money?

The interest in Life Keeper stems from the fact that it claims to warn the patch wearer of a pending heart attack 30 minutes before it actually happens. The company makes the following statement about Life Keeper on its website:
"With this new device, we are able to save the lives of perhaps millions, or more importantly than that, the life of someone you care so dearly about, as to value his or her life far above that of your own. In principle, the system works very simply. The Life Keeper device monitors the flow of your pulse and records a critical or sudden change that is above the permissible levels. The device then sends this data to a medical centre to alert for help. It is widely know that in case of medical intervention within 10-15 minutes after the primary symptoms of a heart attack, there is a chance of saving a patient. Your Life is in Your Hands."

This is the good part of what sounds like an interesting product. There are, however, some problems with the story. Company management are reported to claim that a patent has been registered in connection with Life Keeper, and that it has approval of the US Food and Drug Administration (FDA). No mention is made of the patent or the FDA approval on the company's website, and there is no mention of the approval on the FDA site nor any evidence of a patent having been registered. Further investigation by Israel's Globes newspaper revealed that the Taiwanese company did not report the deal at all, and its London subsidiary denied any knowledge of it. Company management continued to insist that the deal was alive and well despite the vigorous denials by Micro-Star. Globes also reported that no Israeli venture capital company had heard of Life Keeper, nor had any of Israel's leading doctors in the field that Globes approached on the subject. This is especially strange in Israel, which is known for having an environment where everybody knows everybody.

The company's website lists 4 persons as company officers in its Israel headquarters. These are Dr. Amos Bouchnick, Dr. Gavriel Picker, Mr. Arik Klein and Mr. Hagai Hadas. Bouchnik and Klein are reported to be the founders and equal shareholders in Life Keeper. Bouchnik is a dentist who, besides owning a chain of dental clinics, also has a shareholdings in a biotechnology firm as well as a media and marketing company. Klein, it is claimed, is behind the patent and the product's algorithms. Klein is reported to have previously served jail time for fraud. It was further reported that the Israeli Money Laundering Authority is investigating an attempt by Bouchnik and Klein to open a bank account for the purpose of receiving "large sums of money from African countries".

What is far more interesting for me, however, is the involvement in this story of Hadas and Picker. Picker is also a dentist who is reported to be a close friend of Prime Minister Benjamin Netanyahu since first grade. It is claimed that he has treated Netanyahu in the past. Picker, who is listed as the CEO of Safe Keeper, tendered his resignation from the post suddenly on Thursday in a statement via his lawyer. The lawyer claims that the resignation comes after Picker was denied from gaining access to the memorandum of understanding covering the supposed sale to Micro-Star.

Hadas's involvement is of even more interest. He is a former senior member of the Israeli intelligence agency, Mossad. He was recently appointed by Prime Minister Netanyahu to be the special representative to negotiate for the return of captured Israeli soldier, Gilad Shalit. It is widely understood that Hadas had hoped that this appointment may be a step towards returning to the Mossad as its head.

This sorry affair could be counted as just another strange story if it were not for the close links of some of the people to PM Netanyahu. In particular, Hadas has a very important and sensitive job to carry out and the Israeli public require that this job be undertaken only by somebody who can be "loved and trusted" to make the right decisions. His involvement in this sordid story calls Hadas's appointment into question. It also casts further doubts on the decisions being taken by the prime minister.

I am aware of the fact that many people, both in and out of Israel, view the Israeli business environment as one that is riddled with dishonesty and corruption. For those people, this story may not come as any surprise. As somebody who has been involved in this business community for the past 10 years and seen some less than acceptable practices, I find the whole episode shocking. This is not only because of the series of seemingly dishonest activities that took place, but also because of how close it comes to the highest echelons of Israeli politics. It seems as though we have yet to hear the end of this story. Watch this space for more.

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