Saban wants indemnification for Bezeq's spyware damage

Media mogul Haim Saban wants the state to indemnify him for any possible damage Bezeq may suffer from the industrial espionage scandal. The national phone company Saban and his partners recently bought from the state, was apparently up to its neck in the Trojan horse spyware affair.

Bezeq was implicated as an indirect perpetrator, in that two of its subsidiaries - Pelephone Communications and the Yes satellite TV company - are suspected of spying on rival companies, Partner and HOT respectively. But Bezeq was also apparently a victim, as cell phone operator Cellcom is suspected of spying on it.

Be that as it may - and all of the above is still under police investigation - Saban met yesterday with Communications Minister Dalia Itzik and her director general Avi Balashnikov to explain that he insists on indemnification. He made it clear that he refuses to sign a closing agreement buying the state's controlling interest in the national phone company unless the state agrees to protect him if the lawsuits start to roll.

Saban, representatives of the Apax investment group and of pharmaceuticals baron Mori Arkin are supposed to sign the final agreement buying 30 percent of Bezeq in about two weeks. After his meeting with the Communications Ministry officials, Saban is expected to present his demands before Finance Minister Benjamin Netanyahu in a meeting scheduled for Thursday.

Saban also reiterated his request that Itzik promote a legislative amendment that would allow him to keep his shares in Keshet, one of the companies running Channel 2 television, which is one of the two commercial TV stations in Israel. (The other is Channel 10.)

Saban owns 28 percent of Keshet, which he bought right before the company threw itself into the Channel 2 tender - which it won, together with Reshet. After the Bezeq tender, however, Saban learned that under Israeli law, he would probably be required to sell his controlling 23-percent interest in Keshet, to avoid his controlling both Yes satellite TV, and Channel 2. At first he had thought he would only have to sell 4 percent.

The Communications Ministry is leaning toward fulfilling Saban's demands for indemnification regarding the Trojan horse scandal, which has rocked Israel's entire business scene. The cream of corporate Israel has allegedly been involved in the affair, where private detective agencies allegedly employed Trojan horse software to spy on commercial rivals, combing through their computer systems and reading confidential documentation and communiques. Twelve detectives and a slew of top-ranking corporate officers have been arrested in the ongoing investigation.

Saban said that while he may not have known about the investigation when bidding for Bezeq, the government certainly knew, as did the bodies directly involved in the company's privatization - the Government Companies Authority and Finance Ministry, for instance. While no charges have yet been filed either against Bezeq or its subsidiaries, claims could ensue: Pelephone deputy CEO, Gil Sharon, was questioned under caution yesterday by the fraud squad.

Meanwhile, one of the losers of the Bezeq bid, Benny Alagem's consortium, is demanding the tender be reopened in light of the Trojan horse development, if the state decides to lower the price it is getting for the company. It could, in theory: The tender terms did not discuss any indemnification, and the tender explicitly stated that Bezeq was being sold "as is"; and it seems that Alagem may have a good case.

	Communications Minister Dalia Itzik with Haim Saban. (David Bachar)