Bezeq controlling shareholder to step down from board amid probe
Shaul Elovitch, his son and his daughter-in-law notified the board of their intention to resign at shareholders meeting; Bezeq appoints two new directors
Shoshanna Solomon was The Times of Israel's Startups and Business reporter
Bezeq Israel Telecom, the country’s largest telecommunication firm, said Sunday it had appointed two new directors to the board after the controlling shareholder, his son and his son’s wife, said they intend to resign from the board amid a probe into allegations including fraud, bribery and securities offenses.
Shaul Elovitch, his family members, Bezeq CEO Stella Handler and another official at Israel’s largest telephone firm were arrested last week as part of a probe led by the Israel Securities Authority into connections between Prime Minister Benjamin Netanyahu and Elovitch, who controls Bezeq via his Eurocom Ltd. unit. They all deny wrongdoing.
Bezeq’s board held a special meeting Sunday to discuss the situation, at which the members of the board were notified of the planned resignations, a person familiar with the matter said earlier Sunday. There were initially conflicting press reports as to whether Bezeq CEO Stella Handler, who is also in police custody on allegations including fraud, bribery and securities offenses, would be replaced temporarily, but the board did not discuss the matter in the end, press reports said.
Bezeq said Sunday it had appointed Doron Turgeman and Ami Barlev to the board. They will reportedly replace Or Elovitch, Shaul’s son, and Orna Elovitch, the son’s wife, The Marker reported. The two have not yet been fired officially and are still listed as members of the board, along with Shaul Elovitch. Turgeman is an accountant by profession and is the CEO of Internet Gold Golden Lines Ltd. and of B Communications Ltd., both of which are units of Eurocom, through which Elovitch holds a controlling stake in Bezeq.
Barlev is a VP and legal counsel for Eurocom, Bezeq said in filings to the Tel Aviv Stock Exchange. A third director, to replace Shaul Elovitch, has not been named yet.
David Granot, who has replaced Elovitch as temporary chairman at Bezeq, convened the shareholders meeting for Sunday, the Calcalist website reported, to replace Handler and Amikam Shorer, a chief strategy and corporate development officer, who is the other Bezeq official under arrest.
Bezeq shares dropped some 30 percent last year amid the investigation, and activist investor Elliott Advisors, which holds a 4.8% stake in Bezeq, has called on the board to appoint new independent directors and demanded the immediate resignation those who are implicated in the investigation.
The so-called “Case 4000” investigation began as a Securities Authority probe into decisions by the Communications Ministry that consistently and dramatically benefited Bezeq. In return for ministry favors on behalf of Bezeq, Elovitch is suspected of instructing the news website Walla, which he owns, of providing favorable coverage of Netanyahu and his family. Meanwhile, the ministry’s director general, Shlomo Filber, has become a state witness in the case.
Nir Hefetz, a former spokesman for Netanyahu, has also been arrested in the case, and the prime minister himself is said to be a suspect. On Sunday police announced that another suspect, media adviser Eli Kamir, was in custody on suspicion that he received illicit favors in the case. Kamir has been linked to Hefetz, and through him to Netanyahu.
Separately, Bezeq said in a filing on Sunday that an offer to buy Eurocom by a group of investors led by US-Israeli businessman Naty Saidoff has been accepted by creditors and is now awaiting a court ruling. If the deal is approved, then Saidoff and the investors would take ownership of Eurocom and Bezeq, via the units of Eurocom. The arrangement is subject also to other regulatory approvals.
The proposed offer by Saidoff and the group of investors is based on “significant capital investments to be made by the Investor in Eurocom, as well as the Investor helping to settle the balance of Eurocom and the Privately-held Companies’ debt,” Bezeq and the Eurocom units said in a filing to the Tel Aviv Stock Exchange.
