Prosecutors Decide to Indict Former Bezeq Controlling Shareholder Shaul Elovitch

The charges, subject to a pre-indictment hearing, relate to Yes satellite TV merger

Shaul Elovitch, former controlling shareholder of telecom giant Bezeq
Moti Milrod

A number of leading former figures in the Bezeq telecommunications conglomerate, including Shaul Elovitch, the company’s former controlling shareholder, and ex-CEO Stella Handler are to be indicted, the Tel Aviv district prosecutor’s office announced on Sunday, subject to a pre-indictment hearing.

The charges against them will stem from impropriety involving the merger of the Yes satellite television service provider with Bezeq. Elovitch had a majority stake in Yes at the time.

The case arose out of the manner in which Yes shares were purchased by Bezeq, allegedly involving a leak of confidential information from Bezeq’s board of directors. In 2013, Bezeq looked into purchasing Elovitch’s stake in Yes, which he held via his interest in the firm Eurocom. Bezeq already owned a stake in Yes and the acquisition would make Bezeq the sole owner of the satellite television firm.

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The merger process was pursued by a committee that was deemed independent. Its members were members of the Bezeq board. Elovitch and his son Or, whom prosecutors have also recommended indicting in the case, had been barred from dealing with the matter due to the conflict of interest that they had. As a result, they were to have been insulated from any information on the committee’s deliberations.

Prosecutors allege, however, that the committee secretary, Linor Yochelman, leaked information to Shaul and Or Elovitch, who was a Bezeq director, and to Amikam Shorer, a former VP for development at Bezeq who was considered Shaul Elovitch’s right-hand man.

In addition to Shaul and Or Elovitch and Shorer and Yochelman, the prosecutors have recommended indicting Handler, the ex-Bezeq CEO; former Bezeq media consultant Eli Kamir; and Yes CEO Ron Eilon. They suspect that Kamir and Handler sent comments to Communications Ministry Director General Shlomo Filber and instructions as to how he was to relate to the Bezeq group. Prosecutors allege that in essence, the Communications Ministry, which was to regulate Bezeq, was acceding to Bezeq’s requests. The proposed charges against those involved include fraud, corporate breach of trust and securities violations.

The second aspect of the investigation involved suspicions of wrongdoing that ultimately became known as Case 4000 and in which Prime Minister Benjamin Netanyahu has also been implicated for allegedly attempting to influence news coverage on the Walla news website, which Bezeq owns, in exchange for government policy favorable to the telecommunication company. Attorney General Avichai Mendelblit recommended charging Netanyahu, Elovitch and others in that case too, subject to a pre-indictment hearing. They have denied any wrongdoing. Netanyahu is scheduled for a pre-indictment hearing on Case 4000 and two other cases on October 2.

In response to the latest developments, Shaul Elovitch’s lawyer, Jacques Chen said: “Two years after the investigation of the Bezeq case ended, today we received a draft indictment when we are in the middle of the hearing process in Case 4000. From a humane standpoint, it would have been possible and correct to wait with the announcement until the completion of the hearing proceedings [in Case 4000] and a decision [in that case].”

Eli Kamir's lawyers, Sharon Kleiman and Michael Naor, said: "Both the Israel Police and the Israel Securities Authority found that Eli Kamir's actions did not constitute a criminal offense, and it was their recommendation that his case be closed. We believe that after a pre-indictment hearing the prosecution will reach the same conclusion and determine that Kamir acted professionally and in accordance with the law."