Executive Who Quit Bezeq Over Yes Deal Named Its New CEO

David Mizrahi to replace Stella Handler in September at beleaguered telecoms company

The logo of Bezeq Israeli Telecommunication Corp. is seen at the company's headquarters in Tel Aviv, Israel, on Wednesday, Dec. 29, 2010
Ahikam Seri/Bloomberg

In a move that could be seen as a house cleaning at Bezeq, the executive who left the company two years ago in protest against the deal that eventually led to a major securities investigation was named as CEO.

David Mizrahi will replace Stella Handler, who is one of several top executives now under investigation along with former controlling shareholder, Shaul Elovitch. Mizrahi will join Bezeq on September 1 after Handler was asked to extend her term by two months to ensure an orderly transition.

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The Bezeq probe began a year ago when the Israel Securities Authority found alleged securities violations in Bezeq’s purchase of Elovitch’s stake in their joint-venture satellite television company, Yes. The investigation widened over the following months, eventually ensnaring Prime Minister Benjamin Netanyahu.

In November, the Israel Securities Authority recommended Handler be indicted along with Elovitch and other executives. 

Bezeq shares, which have dropped sharply since the ISA investigation first surfaced, ended up 2.2% at 4.09 shekels ($1.13). 

The company remains dogged not only by tougher competition but also by the fact the control of the company remains in contention, with several groups angling to acquire one of its parent companies -- B Communications or Internet Gold. 

Mizrahi worked for some 20 years at Bezeq, rising to the post of chief financial officer before quitting in the summer of 2016 over the Yes deal. After leaving Bezeq, Mizrahi became deputy CEO of Tnuva, Israel’s biggest food maker.  

“No one is better suited than Dudu, who knows Bezeq inside out and will lead the company through the major competitive and technological changes that occurred in the telecommunications market and ensure our continued success,” said Shlomo Rodan, who took over as Bezeq’s chairman after Elovitch was forced to step down last year. 

Meanwhile, Bezeq signaled a step forward in the changes the company is undertaking. 

In a move towards merging its cellphone, satellite television and internet units, the company said on Sunday that Ran Guron, the CEO of its Pelephone cellular unit, would also head its Yes satellite TV operation. He replaces Ron Ayalon, who had headed Yes since 2006 and in the last year got caught up in the police and securities investigations. 

Bezeq is weighing a plan to have its Pelephone, Yes and Bezeq International subsidiaries report to a single CEO after it failed to win regulatory approval to end the government’s bar on structural separation of its operations. 

The move aims to create synergies between the subsidiaries as Bezeq, Israel’s dominant telecoms company, faces increasing competition. However, employees oppose the changes and have declared a labor dispute.