In August a year ago, the company VisIC Menes Ziona, which develops chips for electric vehicles, announced the receipt of an investment of 35 million dollars from Chinese entities. According to Visaisi’s announcement, the investment was led by GoldenSand Capital (GSR) and the Chinese company HG Semiconductor, who invested through an entity called Fast Semi.
This investment is now the focus of a lawsuit filed at the end of July in a Hong Kong court by Asia Direct, an investment bank operating from Beijing, against Visaisi. Asia Direct claims in the lawsuit that Visaisi refuses to pay it a success fee of $1.25 million, due to the introduction and mediation it made between it and the leading Chinese body that invested in the company.
The investment proposal from 2018 did not materialize
Visaisi Mans Ziona was established in 2010 by Dr. Tamara Bakshet (CEO) and Gregory Banin (CEO), and its technology is designed to improve the conversion of energy in an electric vehicle from the charger to the battery and between the battery. To do this, the company Visaisi develops chips based on a chemical compound called “gallium nitride”, which combines gallium and nitrogen – a substance that enables more efficient energy transfer than silicon, which is currently used in the electric vehicle industry. According to data from the research company IVC, including the round in question, Visaisi has raised $63 million since Its establishment According to LinkedIn, the company employs about 50 people.
Asia Direct is an old investment bank founded in 2001 in Beijing by the Israeli Gal Diamant. Asia Direct has been involved in several large transactions in the Israel-China axis, such as Alibaba’s 2018 investment in the start-up SQream and the purchase of Aye Optima, which developed equipment for glaucoma surgery, by the Chinese pharmaceutical company Chengdu Kang Hong in 2017.
According to the lawsuit filed by Asia Direct, it signed two agreements with Visaisi, one in 2014 and the other in 2017. The first agreement dealt with the provision of consulting services regarding one potential investor – a Chinese company called China Crystal Technologies – and stated that Asia Direct would be entitled to a success fee of 5% of the transaction volume on investments from Crystal or subsidiaries.
The second agreement, which is more relevant to the lawsuit, was signed between Visaisi and Asia Direct in June 2017 and includes the provision of various services for business development and fundraising from various Chinese entities. According to the agreement, as it is described in the lawsuit, Asia Direct will be entitled to a 5% success fee for raising debt or investment from entities that it will recognize for Visasi. The agreement can be canceled with a 30-day notice by one of the parties, but Asia Direct will be entitled to success fees for transactions that will be signed with entities that it recognized to Visasi even 12 months after its cancellation (a clause known as the “Tail period”). This agreement was signed under the laws of Hong Kong, which is why the lawsuit related to it was filed there.
In the statement of claim, Asia Direct claims that it introduced the chairman and one of the founders of the GSR Foundation, Sonny Wu, to Visaisi, and mediated the relationship between the two parties, including several personal meetings between them. This acquaintance and mediation led to an investment offer from the fund in June 2018, which ultimately did not materialize for investment. In addition, Asia Direct claims that it has approached other Chinese entities regarding investment in Visasi in 2017 to 2020.
Is the agreement still valid?
According to the lawsuit, Asia Direct learned from media reports in August last year that the GSR Fund had invested in Visaisi and approached Visaisi’s CEO, Dr. Bakshet, regarding success fees. Bakshet wrote in response that the “tail period” (a period in which an investment banker is entitled to payment even after the termination of his services if an agreement has been signed) for contracting between the companies has long since ended, and that this is a completely different deal than what Asia Direct tried to mediate in the past.
However, Asia Direct claims in response in the lawsuit that the agreement signed in 2017 was never canceled by one of the two parties, so it is still valid. In light of this, she demands in the lawsuit a $1.25 million success fee – 5% of the GSB fund’s $25 million investment – plus interest and payment of her expenses.
On behalf of Visaisi, it was stated in response that “a lawsuit was filed by Asia Direct in Hong Kong, but we are not aware of any additional steps taken by Asia Direct to move forward with the lawsuit. In any case, we deny that they are entitled to additional payment, and it is inappropriate to comment beyond the light of the procedures The legal authorities in Hong Kong. The whole purpose of publishing this article is to put pressure on the company, and the company retains all its rights on this issue.”