Scandal-hit Telit Communications is targeted in a ‘£1bn internet merger’ by Sierra Wireless

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A Canadian technology group is circling scandal-hit Telit Communications with a view to creating a £1 billion internet company.

City sources told The Mail on Sunday that Sierra Wireless is interested in merging with Telit, which is listed on London’s Aim market.

Both are ‘internet of things’ companies, designing and making technology that allows machines to communicate with each other.

Telit last year stunned the City when it revealed its chief executive Oozi Cats was at the centre of allegations he is actually a fugitive called Uzi Katz on the run from US police.

Cats, allegedly wanted for his involvement in a 1990s property scam, was fired and replaced by Yosi Fait, the company’s finance director.

He has overseen the disposal of Telit’s automotive division to Chinese firm TUS International for £81 million.

However, Telit revealed on Friday that some of its largest shareholders, including hedge fund manager Davide Serra, have called a general meeting with a view to ousting Fait and Simon Duffy, the senior independent director and former vice chairman of Virgin Media Group.

Serra runs Algebris, one of Britain’s best-known hedge funds.

The move to oust Fait comes after Telit shareholders refused to endorse the appointment of Richard Kilsby, former 888 chief executive, as chairman.

In another move a Chinese investment vehicle, Run Liang, has built a 15 per cent stake in the company over the past year. It is thought to be keen on acquiring a division of Telit or all of it.

Telit declined to comment. Sierra Wireless did not return calls for comment.