Telecom giant Bezeq probe advances; executives sent to house arrest

The investigation of Bezeq concerns suspicions of securities fraud.

July 14, 2017 02:28
2 minute read.
The logo of Bezeq Israeli Telecommunication Corp Ltd, the country's largest telecom group, is seen.

The logo of Bezeq Israeli Telecommunication Corp Ltd, the country's largest telecom group, is seen outside their headquarters in Tel Aviv, Israel June 21, 2017.. (photo credit: REUTERS/AMIR COHEN)

The investigation of telecom giant Bezeq and its controlling shareholder, Shaul Elovitch, widened on Thursday as Elovitch, Bezeq CEO Stella Handler, and Shlomo Filber, the director-general of the Communications Ministry, were sent to house arrest.

The investigation of Bezeq concerns suspicions of securities fraud carried out by Elovitch and others. The probe centers on suspicions that he sold the satellite television service Yes – of which he is also the controlling shareholder – to Bezeq at an excessive price, allowing him to pocket NIS 170 million.

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Earlier this week the Israel Securities Authority said the investigation was expanded to include a communications deal signed with the satellite provider Spacecom Satellite Communication, which is controlled by Elovitch. The Securities Authority at the same time temporary halted trade in shares of Bezeq and Spacecom.

On Thursday, Handler was brought in for questioning at the offices of the Securities Authority.

She was released to nine days of house arrest, ordered to post a NIS 700,000 bond, and forbidden to travel abroad for 180 days.

Meanwhile, Filber was questioned for a second time, “on suspicions of committing integrity and securities offenses,” the Securities Authority said, while Hebrew media reported that he is suspected of transferring confidential government information to Elovitch. Filber was released to 14 days of house arrest on conditions similar to those of Handler.

A representative of the Securities Authority said at the Tel Aviv Magistrate’s Court on Thursday that there is a “real concern” that Handler might disrupt the investigation and that her “involvement in the case is significant.”

Attorney Nati Simchony, who represents Handler, responded that the conditions of her release were “disproportionate” because she previously posted bond and was under house arrest. “The public needs Handler [to run Bezeq],” he said.

Attorney Jack Chen, who represents Filber, previously said his client denies any wrongdoing and has also previously denied any accusation of working in the interest of Elovitch.

On Wednesday, the State Comptroller’s Office issued a report critical of Prime Minister Benjamin Netanyahu and Filber’s undisclosed conflicts of interests regarding Elovitch.

The report said that there should have been restrictions imposed by the attorney-general on Filber’s ability to work on issues related to Bezeq and Yes. Again according to the report, Filber, who was Likud campaign chairman in 2015 and an important Netanyahu aide in earlier years, was named Communications Ministry director-general as a political appointment. The report accused the premier of failing to disclose contacts with Elovitch in his role as communications minister from November 2014 to February 2017.

Yonah Jeremy Bob contributed to this report.

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