After resolving a dispute with William Hill gaming software supplier, Playtech will be parking their backsides back in court again later this year. Founder and part-owner Teddy Sagi and his company just can’t get enough of that court room right now. The latest allegations hardly paint Sagi out to be anything like his name might suggest though.
The Daily Telegraph reports that ValueNet Trading is claiming Sagi and an associate, Yossi Pereg, used “unilateral and aggressive means” in relation to a business deal. It comes down to a venture proposed by Pereg in early 2008. Empire Online employees Gad Hulday and Oron Tzel are claiming ILS40m (£7m) in damages after setting up ValueNet.
Pereg’s deal saw ValueNet benefit from Playtech’s software provision and customer support services from Nation, another of Sagi’s companies. Revenues per player were split 50-50. Hulday and Tzel didn’t hear from Sagi until later on though.
This was when the waters started to get faintly cloudy.
Pereg eventually persuaded the two claimants of the “many advantages” of a partnership with Sagi. In return, the Playtech owner agreed to finance the venture and take 50% of the equity with Pereg taking 25%. The claimants were left with 12.5% each. ValueNet’s growth over the coming months meant that by October 2008 annual profits had hit “close to $18m.”
Sagi wanted more of that pie and sent in his amiable messenger Mr. Pereg to seal the deal. Teddy wanted to “re-open the deal” with Hulday and Tzel waiving their stakes in exchange for a salary and bonus. If they refused, the man Pereg lauded as a “lunatic” would shut them down.
Pereg then indicated “a permanent pattern of operation of Sagi, who recruits people to establish ventures for him, undertakes to finance them and then leaves them with their head in their hands.” This was before ValueNet received a letter demanding the return of a €570,000 loan in 10 days.
The bitching continued as Tzel met with Sagi. The plaintiff reiterated that he would be keeping the 12% stake. Sagi’s reported response was “you live in never-never land,” Pereg telling Tzel, “I was afraid he would hit you.”
Sagi’s defence is that the claimants were only entitled to their stake if they’d worked in Cyprus for three years. The Playtech man’s counterclaim for $1m accuses them of negligence. The pre-trial is slated for October and we fully expect Sagi to turn up in his favorite bear suit to woo the judge and public gallery. Needs to brush up that image of a “lunatic” after all. You can’t even say that Sagi is “all mouth” though. He didn’t do any of the speaking for himself after all.
