Israel Turns the Screw on Tycoons
A protester holds a placard bearing portraits of (from left) Israeli Prime Minister Benjamin Netanyahu, Interior Minister Aryeh Deri, and businessman Isaac Tshuva on Feb. 3, 2016, in front of the Supreme Court in Jerusalem where a hearing took place on a contentious natural gas deal.
Photographer: Menahem Kahana/AFP/Getty Images
For years, Shaul Elovitch lorded over Israel’s communications industry like an emperor. The 69-year-old Polish émigré controlled the country’s largest provider of fixed-line phone and internet service; he owned a news website read by millions; and he was a top investor in the nation’s only satellite TV provider. It didn’t hurt that his chum Benjamin Netanyahu had his back.
All that changed in November, when authorities recommended Elovitch be indicted for securities violations at Bezeq Israeli Telecommunication Corp., where he’s the top shareholder. Investigators say Bezeq executives helped Elovitch boost the price Bezeq paid for his satellite TV operator and colluded with the industry regulator, appointed by Netanyahu, to shape rules to the company’s benefit. Investigators haven’t yet indicted Elovitch, and he denies any wrongdoing. But three major banks have asked an Israeli court to break up his holding company, citing concerns about debt. And on Jan. 16, activist investor Paul Singer said he had bought shares in Bezeq and demanded that board members with ties to Elovitch step down.