Immediate Report – Motion for disclosure and review of documents under Section 198A of the Companies Law
Immediate Report – Motion for Discovery and Inspection of Documents under Section 198A of the Companies Law
An immediate report is hereby issued, stating that on November 1, 2020 the Company was served a motion for discovery and inspection of documents prior to the filing of a derivative action under section 198A of the Companies Law, 5759-1999, which was filed on October 31, 2020 with the Jerusalem District Court against the Company and the subsidiary Bezeq International Ltd. ("Bezeq International") (jointly – the "Respondents"). The motion asks that the Respondents be issued an order for discovery and inspection of various documents concerning the collection of charges from Bezeq International customers.
The motion alleges that the respondents made misrepresentations that led to an inflated value for Bezeq International, by including in their financial statements "dormant subscribers" that do not use Bezeq International's services but continue to pay subscription fees. The upshot, according to that alleged, is that with the discovery of this activity, Bezeq International's value was "slashed by hundreds of millions of shekels." This loss, it is alleged, is the result of malicious or at the very least negligent conduct on the part of the company officers who were aware of the matter, but refrained from rectifying it, or alternatively, were remiss in clarifying the true situation of Bezeq International.
The Company and Bezeq International are studying the motion and will address it as required by law, within the prescribed deadlines.
Bezeq – The Israel Telecommunication Corp. Ltd.
The above information constitutes a translation of the Immediate Report published by the Company. The Hebrew version was submitted by the Company to the relevant authorities pursuant to Israeli law, and represents the binding version and the only one having legal effect. This translation was prepared for convenience purposes only.