Trojan Horse affair: Pele-Phone CEO testifies to police

The police are examining whether Orbotech and Sigma Shipping fell victim in the industrial espionage affair.

12 private investigators, arrested last week on suspicion of involvement in the uploading of Trojan Horse spyware to the computers of various companies and offices in the industrial espionage affair, were brought before the Tel Aviv Magistrates Court this morning. The Israel Police will ask Judge Mordechai Peled to extend the suspects' remand by an additional two weeks.

Pele-Phone CEO Yacov Gelbard also arrived this morning at the offices of the Tel Aviv police district fraud unit to give testimony in the affair.

The Tel Aviv police district fraud unit will examine the computers of two other companies suspected of falling victim in the espionage affair: Orbotech Ltd. (Nasdaq:ORBK), a maker of high-tech inspection and imaging solutions for bare printed circuit board (PCB), flat panel display (FPD), PCB assembly and IC Packaging; and Sigma Shipping, which handles conventional cargo.

The police yesterday detained for questioning two former senior Israeli Security Agency (ISA, formerly known as the General Security Services or GSS) officers who now operate Bnei Brak-based Sital International Security and Intelligence Ltd.. Tuvia Livneh was director of the ISA unit for the protection of dignitaries, facilities, installations and delegations, and later El Al Israel Airlines (TASE:ELAL) director of security. Israel Shay was also director of the ISA unit for the protection of dignitaries, facilities, installations and delegations, and director in charge of security for the ISA in Europe.

Livneh and Shay are suspected of mediating between companies seeking business information and private investigator firms whose staff have been arrested in the affair. The alleged mediation was part of their consultancy services. Sital International's website states that the firm provides, among other services, "business investigations and economic intelligence" and "information and data protection".

Target A representative in Israel Avi Asis was questioned last night. Target A is owned by Michael Haephrati, who is suspected of creating the Trojan Horse viruses. Asis is suspected of helping Haephrati distribute the viruses in Israel.

Published by Globes [online], Israel business news - - on June 2, 2005

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