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Defense Ministry said seeking to block sale of satellite firm to Orban ally

Senior defense officials reportedly fear 4iG’s purchase of majority stake in Spacecom, the operator of the AMOS, could undermine one of Israel’s most important strategic tools

The Amos 17 satellite of Spacecom Satellite Communications (Courtesy)
The Amos 17 satellite of Spacecom Satellite Communications (Courtesy)

The defense establishment is reportedly seeking to block Hungarian communications firm 4iG Plc from purchasing a majority stake in Spacecom Satellite Communications Ltd., the supplier of various Israeli satellite services and the operator of the AMOS fleet of satellites.

Senior defense officials fear that the sale could undermine one of Israel’s most important strategic tools and could lead to a situation in which classified information on citizens, cabinet ministries and various security bodies would fall into the hands of bad actors, the Haaretz daily reported Sunday.

“This is a ridiculous deal that leaves Israel’s satellite communications in the hands of unstable and undemocratic personalities,” a senior defense official told the newspaper.

The sale of Spacecom, which is defined as a “strategic asset,” must be approved by the Defense Ministry.

A security source further told Haaretz, however, that following the sale of various strategic assets to China, such as Haifa Port, desalination facilities, food companies and light rail works, the defense establishment has decided to change its policy and not allow a foreign entity to acquire more than than 20 percent of an Israeli company defined as strategically important.

4iG is a Hungarian information technology and communications firm owned by Hungary’s most powerful oligarch, Leroic Meszaros, a close associate of Hungarian Prime Minister Viktor Orban.

Hungary’s Prime Minister Viktor Orban leaves the building at the end of an EU summit in Brussels, on October 16, 2020. (Johanna Geron, Pool via AP)

Spacecom, which started operations in 1993, operates the AMOS fleet of four communication satellites that serve Europe, Africa, the Middle East and Asia. Customers include satellite TV operators, internet and telephone providers, governments and private data companies. The controlling shareholder of Spacecom is Eurocom Holdings Ltd., which was previously controlled by Israeli businessman Shaul Elovitch.

In June, 4iG said in a filing to the Tel Aviv Stock Exchange that it was in talks to buy 51% of Spacecom for NIS 215 million ($66 million), reflecting a price of NIS 8.5 per share. The proposed acquisition price was at a 68% premium over the average share price of the company on the TASE over the previous six months, leading to suspicions that Meszaros was seeking to acquire the company in order to give Orban control over communications satellites.

Last month, a senior official in Orban’s governing party acknowledged for the first time that the government had purchased Israeli-made Pegasus software that Hungary allegedly used to target journalists, businesspeople and an opposition politician.

An investigation by a global media consortium published in July said that Pegasus, created by the Israeli NGO Group, was used in Hungary to infiltrate the digital devices of a range of targets — including at least 10 lawyers, one opposition politician and several government-critical journalists.

Subsequent investigations by Hungarian investigative journalism outlet Direkt36 have suggested that at least two publishers of government-critical media as well as a former state secretary were also targeted with the software.

Human rights organizations have said Hungry can no longer be considered a democracy after Hungary’s parliament approved a bill in March 2020 giving Orban’s government extraordinary powers during the coronavirus pandemic, and setting no end date for them.

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