2 Min Read
TEL AVIV, June 21 (Reuters) - Tel Aviv Magistrates Court will hear details on Wednesday of an investigation into the chairman of Bezeq Israel Telecom by Israel's securities regulator, the regulator said.
Shares in the country's largest telecom group fell nearly 5 percent on Tuesday when it emerged that the Israel Securities Authority (ISA) raided Bezeq's offices as part of the investigation into deals connected to its controlling shareholder.
Bezeq chairman Shaul Elovitch controls the telecoms company through holding company Eurocom Group.
The ISA has been questioning Elovitch and will ask the court for him to be allowed to go home, but with restrictions on his travel, an ISA spokeswoman said.
Bezeq has said that it does "not have any additional information about the nature and circumstances of the investigation". Eurocom declined to comment and said Elovitch was not immediately available to comment.
Eurocom gives Elovitch control over a myriad of assets like satellite operator Spacecom and Enlight Renewable Energy. He is also a close friend of Prime Minister Benjamin Netanyahu, a relationship that bars Netanyahu from dealing with all things Bezeq.
Israel's financial news websites reported that investigators were focusing on a recent deal in which Bezeq bought control of its satellite TV unit YES from Eurocom and that other executives besides Elovitch had been questioned.
Bezeq has dominated Israel's telecom sector for decades and, with a generous dividend policy of distributing all its net profit, is a favourite among foreign investors. Analysts say the ISA investigation is unlikely to impact Bezeq's operations at this stage.
"We think that business risk is likely to be negligible at this stage," Citi analyst Michael Klahr said. "No one has been charged. Each of the companies within the group has their own CEO and management teams which will continue operating as they were for the duration of this investigation."
Bezeq's shares were flat at 6.17 shekels by 1205 GMT.
$1 = 3.5432 shekels Reporting by Tova Cohen and Steven Scheer; Writing by Ari Rabinovitch. Editing by Jane Merriman