ISRAEL:HP FIRES EMPLOYEES FOR GRAY MRKT

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ISRAEL:HP FIRES EMPLOYEES FOR GRAY MRKT

 user 2006-03-30 at 11:53:00 am Views: 55
  • #15149

    Export Controversy Rocks HP’s Israeli Unit
    Hewlett-Packard’s
    European unit has reportedly reversed a decision last week to fire 14
    employees, including CEO Gil Rosenfeld, following an internal company
    probe of the unit’s export practices.

    TEL
    AVIV, Israel – Hewlett-Packard’s European unit has reportedly reversed
    a decision last week to fire 14 employees, including CEO Gil Rosenfeld,
    following an internal company probe of the unit’s export practices.
    The
    firings reportedly occurred Friday (March 24) after an extensive
    investigation by executives in HP’s European operation, according to
    Israeli press reports. The probe focused on alleged “gray market” sales
    outside Israel, which violates company policies. However, HP Europe
    relented on Sunday after Rosenfeld denied the allegations and claimed
    he was being set up.
    The dismissals were based on suspicions that
    the Israeli subsidiary sold products that were intended for the Israeli
    market to other countries at cheaper prices. The export practice
    violates a permit granted to the Israeli unit by HP that forbids it to
    sell products outside Israel.
    An HP spokeswoman on Monday dismissed statements attributed to the company in the Israeli press as “speculation.”
    The
    company added in a statement: “HP has determined that gray market
    activities were taking place at HP Israel and is currently conducting
    an extensive internal investigation. Gray market activities are not
    unlawful but they violate HP’s own policies and its Standards of
    Business Conduct. HP has made no decisions as of yet, but regardless of
    the outcome, HP remains fully committed to the IT market in Israel.”
    Rosenfeld denied the allegations and demanded HP Europe present him
    with its evidence. Rosenfeld said documents presented to him were not
    tied to gray market activities, and he was planning to petition the Tel
    Aviv Labor Court to obtain a temporary injunction forbidding HP from
    terminating his employment until the case is resolved.
    Rosenfeld
    claimed he discovered the irregularities and approached HP Europe to
    launch an investigation. He further charged that HP Europe’s management
    “has fallen victim to distortions by interested parties seeking to
    mislead it,” adding, “had they accepted my offer to aid in the
    investigation, it would have uncovered the truth. Someone in HP Israel
    passed certain information to executives at HP Global. I am being set
    up.”
    Rosenfeld was likely referring to his predecessor, Ehud Graff.
    Rosenfeld said he discovered irregularities at HP Israel when he took
    over from Graff two years ago. Rosenfeld claimed he notified HP Europe
    about questionable fees paid to Israeli sales agents but was ordered to
    take no action against employees. None of the agents who were paid were
    among the fired employees.