The house arrest of Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) CEO Stella Handler on suspicion of disclosing confidential information to Bezeq controlling shareholder Shaul Elovitch in party at interest deals is a majort blow for the company. Bezeq is conducting its business as usual, but at the same time, it appears that board of directors acting chairman David Granot is preparing to remain in his position for a considerable time.
Bezeq's current aim is to distance the company from the investigation, in order to prevent damage to the company itself and the employees caught in the storm without knowing what hit them. Bezeq is a very profitable and stable company, and its soundness is unassailable. At the same time, however, recent events, and the fact that the company currently has no CEO and no CFO, while acting chairman David Granot became a director in the company only two months ago, and has no experience in the communications industry, pose a major question: how long can the company continue business as usual without a CEO?
It appears that if Handler cannot resume her position this Thursday, when her house arrest is terminated, and the Israel Securities Authority asks the court to ban her presence at Bezeq, Handler may be forced to suspend herself, if only temporarily.
At the same time, as more particulars are learned about Handler's role in the affair, which cannot be published because of the gag order issued by the court, it cannot be ruled out that the board of directors will have to appoint an acting CEO.
In addition, the damage to Bezeq's public image, should Granot fail to clear the air, should be taken into account. Granot was handed a hot potato, but it appears that he does not intend to allow the fact that he is a temporary appointment to prevent him from making decisions. On the contrary, it appears that Granot realizes that he will have to take effective measures within a short time to restore the trust among the public and investors in Bezeq.
Another major question is whether the workers' committee will allow matters to proceed the way they are, or whether it will demand the appointment of an acting CEO. The Bezeq workers' committee is known for not fearing to take measures when the company's financial strength is concerned, and it can therefore be expected to make its voice heard in the near future. Keep in mind that the workers' committee opposed the parties at interest deals being investigated by the Securities Authority, and it can therefore be expected to become involved in an attempt to rehabilitate the company, in view of recent events.
Published by Globes [online], Israel Business News - www.globes-online.com - on July 16, 2017
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