Bezeq Chief Resigns as Netanyahu-Linked Corruption Probe BitesBy
Stella Handler will step down on July 1, telecom firm says
Bezeq shareholders want firm to appoint independent directors
Stella Handler, the head of Bezeq Israeli Telecommunication Corp., will step down on July 1, the latest top executive to depart Israel’s largest telecommunications firm amid a widening corruption probe linked to Prime Minister Benjamin Netanyahu.
Handler, who became Bezeq’s chief executive officer in April 2013, was arrested last month as part of a criminal investigation into alleged influence peddling by close associates of Netanyahu. She was released under house arrest on Feb. 28, as the company appointed Yakov Paz as acting CEO. Police suspect that Netanyahu’s family received positive media coverage from a Bezeq unit, and the company was granted favorable regulation in return.
The CEO’s resignation, announced in a statement on Monday, reflects the tumult plaguing the telecom giant. Controlling shareholder Shaul Elovitch, who is at the center of the investigation alongside Netanyahu, left his post as chairman last year. Investors and analysts have urged the company to overhaul its management as a way to move past the scandals and improve the business, where profits have been sliding for years because of fierce competition.
Elliott Management Corp., the hedge fund founded by billionaire Paul Singer, and other institutional shareholders are pushing Bezeq to appoint independent directors to the board. Bezeq will convene a shareholder meeting to address their demands, according to a Tel Aviv Stock Exchange filing on Monday.
“Investors would like to see changes to top management and a board that is less associated with the investigations,” said Roni Biron, the co-head of research at Excellence Nessuah Brokerage Ltd. “Cleaner corporate governance is essential in restoring investor confidence, but secondary to the regulatory and underlying challenges at hand.”
Bezeq shares dropped 1.7 percent to 5.012 shekels at 12:49 p.m. in Tel Aviv.