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Bezeq ex-owner Elovitch indicted in case that led to probe against Netanyahu

Tycoon and series of former executives accused of securities fraud; prosecutors say they’re weighing filing charges against Walla, Yedioth Ahronoth media groups in Case 4000

Shaul Elovitch arrives at the Jerusalem District Court on May 24, 2020. (Amit Shabi/Pool/Flash90)
Shaul Elovitch arrives at the Jerusalem District Court on May 24, 2020. (Amit Shabi/Pool/Flash90)

The former owner of telecommunications giant Bezeq, Shaul Elovitch, was indicted Wednesday on charges of fraud, breach of trust, receiving illicit gifts and violations of the Securities Law, in a case that had previously led to the opening of the most serious of the three cases for which Prime Minister Benjamin Netanyahu is currently on trial.

The securities case involving Elovitch and other former major Bezeq officials is separate from the case against Netanyahu, known as Case 4000, in which Elovitch is also a defendant along with his wife Iris.

Prosecutors also announced that they were considering filing charges against Bezeq and the Elovitch-owned Walla news website in Case 4000, as well as against the Yedioth Ahronoth daily in another case against Netanyahu, known as Case 2000. The filing of such charges could delay the trial against Netanyahu.

That development came despite an unsourced report last month by the Globes news website that claimed Attorney General Avichai Mandelblit had decided not to file charges against the media groups.

In Case 4000, Netanyahu is accused of an illicit quid pro quo with Elovitch — who was also the owner of the Walla news website — that continued for about four years, until early 2017. The alleged understanding saw Elovitch ensure more favorable coverage of Netanyahu at Walla, and critical coverage of Netanyahu’s rivals, especially in the 2013 and 2015 election periods.

Prosecutors say that, in return, Netanyahu intervened in regulatory and other business decisions relating to Bezeq that benefited tycoon Elovitch to the tune of NIS 1.8 billion, some $500 million.

In Case 2000, one of the three criminal cases against Netanyahu, the prime minister is accused of attempting to reach an agreement on positive news coverage with Yedioth Ahronoth publisher Mozes in return for pushing legislation to hobble rival newspaper Israel Hayom.

The indictment in the securities case was filed Wednesday at Tel Aviv District Court against Elovitch; his son and former Bezeq director Or Elovitch; former secretary Linor Yochelman; the former CEO of Yes, Bezeq’s satellite TV subsidiary, Ron Eilon; and former Yes CFO Mickey Naiman.

Bezeq CEO Stella Handler at a hearing at Tel Aviv Magistrate’s Court on February 18, 2018. (Flash90)

Notably, former Bezeq CEO Stella Handler wasn’t indicted. Prosecutors said they signed a deal with her that saw her admit to wrongdoing and that includes her paying a NIS 400,000 ($124,000) fine and being barred from serving in a corporate position for nine months, in addition to over two years in which she has already been barred from holding such a capacity.

The case originated in two probes. One concerns the fraudulent expense of NIS 110 million ($31,154,750) out of a possible NIS 170 million ($48,148,250) from Bezeq’s budget as an exchange for Elovitch selling his shares in Yes to Bezeq in a 2015 stakeholder transaction.

The Taxation and Economics Division believes there is sufficient evidence to prove that senior Bezeq executives finessed the company’s performance to show that they had met their quarterly objectives in order to have the deal fast-tracked. In exchange, they were given bonuses and promotions from Elovitch.

The second probe that ushered in Case 4000 surrounds allegedly fraudulent committees that Elovitch set up at Bezeq to approve transactions of stakeholders he wanted. This was done through the telecom firm’s leaking of sensitive business information to the other parties in the transactions, which were often private companies under his control.

Among the agreements approved in this fashion was the merger of Bezeq with Yes, a development that eventually went ahead and is said to have earned Elovitch hundreds of millions of dollars.

Elovitch’s lawyer Jack Chen said that the double indictment his client now faces “reflects the tough treatment Mr. Elovitch is getting.” He alleged “inhumane” investigation tactics were used against Elovitch, and said he would “continue to fight for his innocence out of confidence that justice will be made by the court.”

Prime Minister Benjamin Netanyahu, with his lawyers in the courtroom, as his corruption trial opens at the Jerusalem District Court, May 24, 2020. (Ronen Zvulun/ Pool Photo via AP)

Prosecutors also announced that they were closing the cases against a series of officials in Case 4000 itself, including Or Elovitch, Amikam Shorer, Eli Kamir, businessman Zeev Rubinstein, former Communications Ministry director-general Eitan Tsafrir, Tzafrir’s former assistant Adi Kahan, and former Bezeq VP Regulation Sharon Fleischer.

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