The Israel Securities Authority (ISA) announced today that the investigation into the Bezeq group had been expanded to the deal for provision of satellite communications services between Spacecom Satellite Communications Ltd. (TASE:SCC) and satellite broadcaster Yes. "The investigation is into the suspicion of offences against the Securities Law and the penal code," the ISA's announcement said.
Trading on the Tel Aviv Stock Exchange was suspended this afternoon in the four stocks of the Bezeq group: Bezeq itself, Spacecom, B Communications, and Internet Gold.
A few years ago, Yes signed an agreement with Spacecom for broadcasting services until 2028. The agreement caused unease among Bezeq's senior managers, who thought that use of satellites should be reduced as much as possible and that a switch should be made as early as possible to using Bezeq's NGN network.
In the end, after pressure from Bezeq controlling shareholder Shaul Elovitch, who wanted a long-term agreement in order to raise finance for Spacecom, which he owns, the Bezeq board approved the telecommunications agreement, which caused considerable friction between the Bezeq board and the company's management.
Early this year, when Spacecom's Amos 6 satellite was destroyed on launch in an explosion, Yes had a golden opportunity to rid itself of the problematic long-term agreement. Yes saw itself entitled to cancel or curtail the agreement and finally to switch to using Bezeq's network, which was by then much more well-established than it had been. Besides the problems of using satellites, the agreement imposed a heavy annual cost on Yes.
Against his background, Gad Perez reported in "Globes" on January 17 this year that Shaul Elovitch was concocting a party at interest deal to benefit Spacecom at Yes's expense.
Published by Globes [online], Israel business news - www.globes-online.com - on July 11, 2017
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