Trade in Bezeq stocks halted due to probe into controlling shareholder

Shaul Elovitch investigated for suspicions of violations of the securities law.

June 20, 2017 10:29
1 minute read.
Tel Aviv Stock Exchange

An electronic board displaying market data is seen at the entrance to the Tel Aviv Stock Exchange. (photo credit: REUTERS)

The Israel Securities Authority said it opened an investigation on Tuesday into Israel’s largest telecommunications company Bezeq and its controlling shareholder, Shaul Elovitch, bringing trading in Bezeq’s stock to halt for a few hours.

The authority said that the probe “concerns suspicions of offenses committed which would breach the securities law and the penal code regulating the controlling shareholder.”

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Israel’s financial news websites reported that investigators were focusing on a recent deal in which Bezeq bought control of its satellite TV unit from Eurocom.

Shares of the company’s stock were halted on Tuesday for a few hours and the stock closed down 4.8%. A spokeswoman for the authority said earlier on Tuesday that trading would remain halted until Bezeq issued a report on the matter.

Bezeq, in a statement given to Channel 2, said: “The company was informed of the Securities Authority investigation in the morning hours and the cause of the investigation is unknown. In the meantime, the company intends to issue an immediate report to the Tel Aviv Stock Exchange as soon as possible.”

Prof. Shmuel Hauser, chairman of the authority said, “There is no leniency in enforcement, no exemption for celebrities.” He spoke at a conference held by the Israel Democracy Institute in Jerusalem on Tuesday.

A spokeswoman for the authority said it chose to publicly announce the investigation to prevent investors from trading without knowing there is an investigation. “We were afraid that it could cause damage to the investors once there this information surfaces,” the spokeswoman said. “It is not exactly insider information but some of the public would know about this and others would not.”

Reuters contributed to this report.

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