Investigation of Bezeq-YES Deal Continues

YERUSHALAYIM -
A Bezeq Israeli Telecommunication Corp. building (Kobi Gideon/Flash90)

Senior staff in phone company Bezeq, the YES satellite communications company, and communications holding company Eurocom will continue to be questioned by officials of the Tel Aviv Stock Exchange Wednesday, as part of the ongoing investigation into the purchase of YES by Bezeq in 2015.

Shaul Elovitch, one of Israel’s richest citizens and the chairman of Eurocom — which owns both YES and Bezeq — will be questioned as well, as he was on Tuesday, when the TASE first announced that it was investigating the deal. The company officials were questioned until the late hours of Tuesday night, and were released on the promise that they would return the next day. The TASE obtained a court order limiting the movement of the officials. They cannot leave the country and must remain near their homes, only traveling to the TASE, where they are being questioned.

The investigation revolves around the purchase of YES by Bezeq — a deal that was hotly debated, because of the fear that it would create a communications entity too big to compete with. The deal was approved in the end, with Bezeq authorized to purchase 50.2 percent of YES shares, making the company the majority shareholder, via Eurocom, which owns Bezeq.

According to investigators, the deal was conducted with elements of fraud and share manipulation. Investigators believe that some of the payments in the transaction were contingent upon YES’s cash flow targets, and manipulation may have taken place to ensure that those targets were met to enable the deal to go through. None of the parties being investigated have yet made a public statement on the matter.