The convictions of directors in the Peled-Givony affair oblige the dismissal of executives and directors of Bezeq The Israeli Telecommunication Co. Ltd. (TASE: BEZQ), say sources knowledgeable about the executive options and bonuses scandal at company. The sources say that Bezeq CEO Yacov Gelbard must leave.
The sources said that the conviction of three Peled-Givony directors for not properly verifying the figures in the financial reports of subsidiary companies could have relevance for the Bezeq case. They said that there would be no problem in taking similar measures against Bezeq directors, who, even if they played no active role in approving the executive options and bonuses, bear responsibility for them as a function of their job.
Other sources said that if no heads roll at Bezeq following the probe by the appointed outside examiner, the Israel Securities Authority would open a criminal investigation. They said the public mood will force the ouster of Bezeq’s top three executives: Gelbard, who has taken two weeks involuntary vacation, chairman Dov Weissglas, and general counsel Adv. Bosmat Shalosh.
Sources at Bezeq say that Weissglas was legally prevented from attending board meetings that discussed the executive stock option grants, because he was one of the beneficiaries. The sources added that the bonuses were never brought before the board, but were only handled by the audit committee, which meant that Weissglas could not have known about them.
The Peled-Givony affair was uncovered in 2002, following the collapse of a cluster of public companies, which were acquired by a group of investors headed by Rafi Peled, Arie Givony, David Wahabi, and Tal Jaegerman. The bankrupt companies left NIS 800 million in debts. The Securities Authority opened an investigation and raided Peled-Givony’s offices on suspicion of misleading investors. The Securities Authority charged that the financial reports of subsidiaries, including Feuchtwanger Industries Ltd., were no published in order to conceal the removal of millions of shekels from them and their transfer to Peled, Givony, and other investors.
Published by Globes [online], Israel business news - www.globes.co.il - on April 4, 2007
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