By Tova Cohen
TEL AVIV (Reuters) - Israeli police made arrests on Sunday that included senior executives from Bezeq, the country's largest telecom group, after the markets watchdog uncovered new information during its investigation into the company.
The Israel Securities Authority (ISA) has been investigating Bezeq over possible fraud and financial reporting offences and company officials, including its former chairman, were arrested in 2017.
Israeli media reported investigators were looking into allegations that Bezeq received benefits in return for enabling favourable media coverage of Prime Minister Benjamin Netanyahu.
A spokesman for Netanyahu denied the allegations.
A joint statement from the police and ISA said details of the new probe were under a gag order.
Bezeq said in a statement to the stock exchange it had no additional information on the new investigation. A company spokesman declined to provide further details.
In June 2017, the ISA said it was investigating suspicions that former Bezeq chairman Shaul Elovitch had meddled in the 2015 merger between Bezeq and its satellite TV unit YES for personal financial gain.
Elovitch, who owns the Eurocom Group that controls Bezeq, has denied any wrongdoing and no charges have been brought against him.
In November the ISA said it had found enough evidence to support bringing criminal charges against senior officials at Bezeq, leaving it to Tel Aviv prosecutors to decide whether to indict.
"Due to evidence the securities authority uncovered in the Bezeq affair that raised suspicions of additional crimes, this morning a new joint investigation was opened ... in which a number of suspects were arrested, including senior executives in the Bezeq group," the joint statement said, providing no further details.
A 48-hour gag order issued by a Tel Aviv judge prohibits publication of information that could identify the suspects.
The new investigation is expected to focus on suspicions that Bezeq received benefits in exchange for favorable coverage of Netanyahu on the Walla website also controlled by Eurocom, Israeli media reported.
"This is another false allegation against the prime minister," a spokesman for Netanyahu said. "The prime minister did not act in favor of Elovitch and Bezeq, not for favorable coverage or anything else."
Police on Tuesday recommended Netanyahu be charged with bribery in two separate corruption cases. The first involves receiving gifts from businessmen. The second involves discussing a deal with the publisher of Israel's best-selling newspaper for better coverage in return for curbs on a rival newspaper.
Netanyahu denies wrongdoing in both those cases and it is up to the attorney general to determine whether to file charges against him, a decision that could take months.
Elovitch stepped down as chairman at the outset of the investigation in June and was temporarily replaced by David Granot.
Activist investor Elliott on Jan. 16 disclosed it held 4.8 percent of Bezeq and called for the resignation of all its directors implicated in the investigation and those affiliated with Eurocom.
Elovitch is under pressure to sell Eurocom, which is laden with nearly 1 billion shekels ($282 million) in debt.
Bezeq shares were down 0.1 percent on the Tel Aviv Stock Exchange on Sunday
($1 = 3.5455 shekels)
(Additional reporting by Ari Rabinovitch and Maayan Lubell in Jerusalem, Editing by Steven Scheer and Toby Chopra)