Ministry of Communications director general Shlomo Filber apparently took action to assist Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) in the presentation of its financial statements, sources inform "Globes."
In 2015, Filber sent a letter to the Israel Securities Authority on a tax question containing a request that Bezeq should be allowed to recognize a tax asset in its profit. One of the issues that arose from Bezeq's acquisition of full ownership of DBS Satellite Services (1998) Ltd. (YES) was whether the tax asset created by the deal could be included in Bezeq's profit, and be distributed as a dividend.
According to senior sources familiar with the matter, the merger between Yes and Bezeq generated an NIS 831 million tax asset, which Bezeq posted in its 2016 balance sheet. Because a complex question was involved, Bezeq asked the Securities Authority for a pre-ruling, while at the same time asking the Ministry of Communications to support its stance.
The Securities Authority expressed strong objection, and eventually did not allow Bezeq to recognize the tax asset as part of its profit, which denied Bezeq controlling shareholder Shaul Elovitch another NIS 831 million in dividends.
Sources inform "Globes" that Filber attempted to intervene in Elovitch's favor in this case by sending the Securities Authority a detailed letter supporting Bezeq's position, a letter that failed to achieve its purpose.
The Ministry of Communication's flexibility
This is not the first time that Filber's name has surfaced in the affair. It is suspected that Filber helped in the approval of the Yes-Bezeq deal. As reported by "Globes," Bezeq sources reported that they heard company secretary Linor Yochelman tell Bezeq executives that Sara Netanyahu had promised Elovitch's wife that the deal would be approved. "Globes" is aware of other parties associated with the prime minister who were involved in the approval process.
The prime minister was actually barred from approving the deal, and did so contrary to the recommendation of then-Ministry of Communications director general Avi Berger. A few months after the prime minister approved the deal, the Attorney General ruled that he was barred from being involved in Elovitch's affairs because of their personal friendship. This did not, however, result in the deal being struck down.
It is true that letters of this type were approved by Ministry of Communications legal advisor Dana Noyfeld and others in the ministry. Regardless of this legal coverage, however, it is difficult not to see a pattern in the ministry's conduct towards Bezeq over the past two years.
Published by Globes [online], Israel Business News - www.globes-online.com - on June 26, 2017
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