JERUSALEM (Reuters) - The Israel Securities Authority (ISA) said on Monday it had found enough evidence to support bringing criminal charges against senior officials at Bezeq Israel Telecom.
The ISA, which has been investigating possible fraud and financial reporting offences involving executives at Israel’s largest telecoms group, including its chairman, said it was submitting its findings to the Tel Aviv District Attorney, who will decide whether or not to bring indictments.
Bezeq Chairman Shaul Elovitch denied any wrongdoing. The company declined to comment on Monday about the ISA statement.
“In the framework of this complex and multifaceted investigation ... the Israel Securities Authority concluded that there is a foundation of evidence, apparently, that establishes the involvement of the main suspects in the case,” the ISA said.
The ISA announced in June that it was investigating Bezeq, focusing on allegations that Elovitch, its controlling shareholder, had meddled in the merger between Bezeq and its satellite TV unit YES for personal financial gain.
The investigation has since branched out, touching on deals involving satellite operator Spacecom, which is also controlled by Elovitch, and even led to the director-general of Israel’s Communications Ministry being placed under house arrest.
Elovitch and Bezeq CEO Stella Handler had also been remanded temporarily to house arrest.
Shares in Bezeq have fallen 17 percent since the case was made public but were up 2 percent on Monday, trading at 5.36 shekels.
“We believe beyond any shadow of doubt that no offence was committed and that it will be determined as so,” lawyers representing Elovitch said in a statement.
In 2015 Bezeq acquired the remaining stake in YES for about 1 billion shekels (£217.1 million) from parent company Eurocom, a holding group also owned by Elovitch. The ISA said it had evidence that financial reports related to that deal were manipulated, illegally triggering 170 million shekels in milestone payments to Elovitch.
The regulator also said it uncovered what seemed to be an illicit channel of communication that Elovitch and his associates had with an independent committee at Bezeq, as well as systematic information sharing with the director-general of the Communications Ministry to promote Bezeq’s interests.
Additional reporting by Tova Cohen; Editing by David Goodman