The Israel Securities Authority has launched an investigation into the country's largest telecommunications group, Bezeq, and its controlling shareholder, Shaul Elovitch, the regulatory authority said on Tuesday. The probe "deals with suspicions of violations of the securities law and the penal code relating to transactions connected to the controlling shareholder," the authority said in a statement. It did not elaborate, citing concerns for the integrity of the investigation. Elovitch controls Bezeq through his Eurocom Group. Other large entities making up Bezeq's controlling core include the Pelephone mobile phone company, Yes Satellite television company, and Walla Communications. Sources privy to the investigation told Israel Hayom that the case focuses on alleged violations of the securities law on party-of-interest transactions in the recent merger of Yes Satellite into Bezeq, the subsequent tax settlement, and provisions in the merger agreement to ensure Eurocom makes more money from the deal. Securities Authority investigators raided Bezeq's offices on Tuesday and detained several senior Bezeq executives for questioning, including Elovitch. Yes Satellite offices were also raided and CEO Ron Eilon was questioned by the Securities Authority. News of the investigation caused Bezeq shares to drop 4.8% Tuesday, prompting the Tel Aviv Stock Exchange to temporarily suspend trading. Bezeq is a prominent TASE company, valued at 17 billion shekels ($4.8 billion). A Bezeq statement said the company learned of the investigation on Tuesday morning and "the company does not have any additional information about the nature and circumstances of the investigation." The Eurocom Group declined to comment, but Eurocom subsidiary Internet Gold said it was suspending a planned bond issue as a result of the investigation. Eurocom gives Elovitch control over assets including satellite operator Spacecom and Enlight Renewable Energy. Bezeq has dominated Israel's telecommunications sector for decades, and, with a generous dividend policy of distributing all its net profit, is a favorite among foreign investors.
Securities regulator launches probe into Israel's largest telecom firm
Israel Securities Authority investigators question Bezeq Chairman Shaul Elovitch, Yes Satellite CEO Ron Eilon on suspicion that the companies' merger violates securities law • Trading in Bezeq shares is temporarily suspended after shares plummet.
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