The acting chairman of the Bezeq telecommunications giant and an adviser to Austrian Chancellor Christian Kern were among those detained as part of a large investigation into money laundering allegations that also netted Israeli diamond mogul Beny Steinmetz Monday, according to officials and media reports.
Bezeq informed the Tel Aviv Stock Exchange Monday that acting chairman David Granot was detained by police Monday morning, in a money laundering investigation centered around Steinmetz.
Police later requested an extension of Steinmetz and Zilberstein’s remand during a hearing at the Rishon Lezion Magistrate’s Court.
In a letter to the exchange, Bezeq said that police informed the company that it is not connected to the investigation and has no information on the probe.
The detainment of Granot — who was appointed acting chairman in late June — was the latest blow for Bezeq, whose controlling shareholder Shaul Elovitch is engulfed in a fraud probe that has shaken Israel’s largest telecommunications firm.
Hebrew media reports had earlier named one of the people detained as a well-known figure in Israeli banking. It was not immediately clear if this was Granot, who has previously served as CEO of Israel Discount Bank, Union Bank of Israel and First International Bank of Israel.
יו"ר דירקטוריון בזק, דוד גרנות, נעצר לחקירה בפרשת הלבנת הון שבמסגרתה נעצר גם המיליארדר בני שטיינמץ pic.twitter.com/VKbMa4ZJFb
— ידיעות אחרונות (@YediotAhronot) August 14, 2017
In addition to Granot and Steinmetz, three other suspects were also detained for questioning by the Police National Fraud Unit.
The suspects were brought in for questioning during the morning on suspicion of money laundering, falsifying documents, using fake documents, false registration of corporate documents, fraud, breach of corporate trust, obstruction of justice, and bribery, police said.
Austrian media reported that Tal Zilberstein, an adviser to Austrian Chancellor Christian Kern, was also among those detained, but there was no official confirmation.
Kern’s Social Democrats issued a statement saying they will no longer work with him “after the legal accusations that have emerged out of Israel today.”
Zilberstein has also worked as an adviser to former prime minister Ehud Olmert.
In December 2015 it was reported that Zilberstein and Steinmetz were accused of involvement in a 136 million euro corruption investigation in Romania.
Judicial sources in Bucharest had said they believed Steinmetz and Zilberstein conspired with the Romanian businessman Remus Truica to illicitly transfer state-held lands to another Romanian citizen at an alleged cost to the state of nearly $150 million, the Romania Libera daily reported at the time.
After being detained Monday, the five suspects were questioned under caution, meaning they are considered suspects in the case.
Raids were also carried out at their homes and offices.
A statement said police suspect the group acted “acted systematically together with the prime suspect in order to create and present fictitious contracts and transactions, among other things in real estate deals in a foreign country, for the purpose of money laundering and money transfers,” the statement said.
A police source said Steinmetz was the prime suspect in the case.
According to Hebrew media reports, the probe grew out of an investigation into bribery allegations involving mining rights in Africa.
Steinmetz, who made billions as a diamond and mining magnate, was arrested on December 19 and accused of paying millions of dollars in bribes in the Republic of Guinea in exchange for advancing his business interests in the country.
He was held under house arrest at the time and later released.
According to Forbes, he is worth $1.02 billion, making him one of Israel’s richest people.
The investigation is being carried out in cooperation with international law enforcement bodies as well as the Israel Money Laundering and Terrorism Financing Prohibition Authority, tax authorities, and the State Prosecutor’s international crime unit, police said.
Police said it was not yet known if they would request that the suspects be kept in custody.
AFP contributed to this report.