June 28, 2017 / 3:58 PM / a year ago

Israel's Bezeq Tel appoints Granot as interim chairman during fraud investigation

JERUSALEM, June 28 (Reuters) - Bezeq Israel Telecom appointed independent director David Granot as interim chairman on Wednesday while the incumbent is being investigated for fraud.

The Israel Securities Authority (ISA) raided the company’s offices last week as part of an investigation into Chairman Shaul Elovitch and other Bezeq executives over alleged improprieties.

The investigation centres on the company’s 1 billion shekel ($285 million) acquisition of the remaining stake in its satellite TV unit, YES, from Eurocom Group in 2015.

Elovitch, who controls Bezeq through holding company Eurocom Group, was held for questioning before being released on a 5 million shekel bail by a Tel Aviv court last Wednesday. He is also banned from going to company offices and may not leave the country for six months.

Elovitch may only interact on matters dealing with Bezeq and its units through their chief executives or through Granot, Bezeq said in a statement via the Tel Aviv Stock Exchange. He must not have any dealings with YES at all.

Elovitch and the other Bezeq executives involved in the investigation have all denied any wrongdoing.

Granot became an independent director of Bezeq last month. He was previously chief executive of Israel Discount Bank , one of the country’s biggest banks.

Eurocom gives Elovitch control over a myriad of assets such as 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 Bezeq.

Bezeq’s shares have shed 11 percent since the investigation began last week. ($1 = 3.5037 shekels) (Reporting by Steven Scheer; Editing by Susan Fenton)

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