Communications Ministry chief interrogated in Bezeq probe

Shlomo Filber questioned by regulator over suspected ethics violations and securities fraud as investigation of telecom giant gathers pace

Shoshanna Solomon is The Times of Israel's Startups and Business reporter

Bezeq workers installing fiber optic cables. (Courtesy)
Bezeq workers installing fiber optic cables. (Courtesy)

The Israel Securities Authority said on Wednesday that the senior official at the Communication Ministry who had been brought in for interrogation on suspicion of ethics violations and securities fraud is the director general of the ministry, Shlomo Filber. The questioning is part of a probe of Bezeq, Israel’s largest telecommunication firm, the ISA said in a statement.

Earlier Wedneday the ISA had said an official at the ministry was brought in for questioning, without naming him. No further information was released due to an injunction requiring details to remain undisclosed.

Filber was appointed to the post by Prime Minister Benjamin Netanyahu in June 2015, and has been criticized for his lenient policies toward telecom firms, including Bezeq. In an interview with Bloomberg in 2015 Filber suggested that competition in the telecom market had gone too far. He later denied saying that.

A report released on Wednesday by Israel’s State Comptroller, that looked into the functioning of the ministry in the fixed line telephony reform, said that Filber gave Bezeq the green light to merge with its units without the knowledge of the professional civil servants at the ministry. The discussions with Bezeq were also not documented, the report said. The Comptroller’s report was submitted for review of the ISA before it was published, the comptroller’s office said in a statement.

The ISA is investigating officials in the Bezeq group of companies and other firms related to the controlling shareholder of the telecom giant.

Trading in Bezeq was halted for the second time on Tuesday as the probe was expanded to include dealings between satellite broadcaster Yes and Spacecom Satellite Communications Ltd., the ISA said Monday. Both firms are controlled by Bezeq controlling shareholder Shaul Elovitch. The investigation into these additional companies stems from suspicions of offenses under the securities and the penal code, the ISA said.

Last month, investigators from the ISA raided the offices of Bezeq and pulled in its controlling shareholder for questioning. Trading was halted on that day for Bezeq and its holding companies, B Communications and Internet Gold-Golden Lines Ltd., following the ISA investigation into the company, Bezeq said in a filing to the Tel Aviv Stock Exchange on June 20.

At the center of the probe is reportedly the NIS 680 million ($193 million) cash acquisition of Yes shares by Bezeq from Elovitch in 2015, a deal that was opposed by many of Bezeq’s institutional investors.

A day later, Tel Aviv Magistrate’s Court issued travel bans of six months to businessman Elovitch, director of the YES television cable company Ron Ayalon, and the YES financial director Michal Neeman.

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