Israel securities regulator opens investigation into Bezeq


Reuters

UPDATE 2-Israel securities regulator opens investigation into Bezeq


(Adds Bezeq and analyst comments, details)
    By Ari RabinovitchJERUSALEM, June 20 (Reuters) - The Israel Securities
Authority said on Tuesday it had opened an investigation into
the country's largest telecom group, Bezeq Israel Telecom
<BEZQ.TA> and its controlling shareholder.
    The market regulator said in a statement that the probe
"deals with suspicions of violations of the securities law and
the penal code relating to transactions connected to the
controlling shareholder". It did not elaborate.
    Trading in Bezeq and its parent companies was halted in Tel
Aviv following the announcement.
    The company said it learned of the investigation on Tuesday
morning and that its offices were searched.
    "The company does not have any additional information about
the nature and circumstances of the investigation," it said.
    Bezeq is controlled by its chairman, Shaul Elovitch, through
holding company Eurocom Group, which declined to comment.
    But another Eurocom subsidiary, Internet Gold <IGLD.TA>,
said it was suspending a planned bond issue as a result of the
investigation.
    Eurocom gives Elovitch control over a myriad of assets like
satellite operator Spacecom <SCC.TA> and Enlight Renewable
Energy <ENLT.TA>. He is also a close friend of Prime Minister
Benjamin Netanyahu, a relationship that bars Netanyahu from
dealing with all things Bezeq.
    "A prolonged trading halt is a rather rare procedure which
requires approval from the Tel Aviv Stock Exchange's chairman
and cannot exceed one trading day and gives the company a chance
to provide colour to the market," Barclays analyst Tavy Rosner
said in a note.
    Israel's financial news websites reported that investigators
were focusing on a recent deal in which Bezeq bought control of
its satellite TV unit from Eurocom.
    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.
    Looking to shore up its position further, Bezeq is lobbying
the government to end a forced separation of its fixed-line,
mobile and satellite TV units.
    However, opponents say that allowing Bezeq to combine its
subsidiaries into a single company will stifle competition.

 (Additional reporting by Steven Scheer; editing by Alexander
Smith)
 ((ari.rabinovitch@thomsonreuters.com;  +972-2-632-2202; Reuters
Messaging: ari.rabinovitch@thomsonreuters.com@reuters.net))

Keywords: BEZEQ INVESTIGATION/ (UPDATE 2)



This article appears in: Stocks , Politics
Referenced Symbols: BEZQ , ENLT , IGLD , SCC


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