The industrial espionage affair is spreading, with more companies joining the list of victims on one hand, and others joining the list of those suspected of spying on their competitors by uploading Trojan Horse viruses into the companies' computers.
Israel Police National Fraud Unit today summoned Mayer's Cars and Trucks chairman Jacob Shachar to its offices to supply evidence in the case. Shachar is also the president of the Maccabi Haifa football club, and, through Mayer's Cars and Trucks Ltd., a controlling shareholder in Israel Phoenix Assurance Ltd. (TASE:PHOE1;PHOE5).
Mayer's Cars and Trucks is suspected of spying on its competitor Champion Motors Ltd., importers of Volkswagen (XETRA:VOWG; LSE:VKW) and Audi AG (DAX:FSU). Jacob Shachar's son, Or Shachar, Mayer's Cars and Trucks CEO Uzi Mor, the company's spare parts manager Arik Sinai, and Avner Kass, the son of Shachar's partner in the company, Israel Kass, have already been arrested in the case, and released to house arrest.
In the coming days, police investigators will examine whether industrial espionage occurred in the insurance and banking industries, and in the capital market.
Police Fraud Unit investigators have visited the offices of ad agencies Bauman-Ber-Rivnay Saatchi and Saatchi and Bar Lehavi Koren as part of the investigation. Police sources say an unsuccessful attempt had apparently been made to upload a Trojan Horse into the agencies' computers. The police yesterday detained for questioning a resident of central Israel suspected of mediating between the investigation agencies involved and the companies ordering the confidential information.
Tel Aviv Police District Fraud Unit investigators yesterday raided the offices of international calls carrier Bezeq International Ltd., and detained for questioning its VP marketing and a strategic researcher. The company is suspected of obtaining from private investigators business information of Golden Lines International Communication Services Ltd. by uploading a Trojan Horse into computers of ad agency Shalmor-Avnon-Amichay Young and Rubicam.
The two senior Bezeq International employees initially gave evidence, but the police quickly informed them that they had become suspects in the affair and that the questioning would be under caution, since they were liable to be affected by the results. The two employees were taken to the Fraud Unit's offices, where they were questioned under caution. They were jointed shortly afterwards by Bezeq International CEO Avi Gabai, who was also questioned under caution. After an hour's questioning, Gabai was released to house arrest for five days.
Bezeq International has joined other Pele-Phone Communications Ltd. and YES satellite broadcaster as the third Bezeq (TASE:BZEQ) subsidiary suspected of commissioning industrial espionage against its competitors. The police will probably have no choice but to examine whether Bezeq's heads knew that information was being obtained by illegal means.
Bezeq International said in response, "The company has nothing to hide, and is cooperating with the police as much as necessary. Bezeq International obeys the law, and we are sure that no employee has broken the law."
Yesterday, the police also questioned Univercol-Nirlat (TASE:) CEO Eldad Ben-Moshe and the company's CEO. Nirlat, a paint and sealant maker, is a subsidiary of Shrem Fudim Kelner & Co. (TASE:SFK). Both men were released to five days house arrest after questioning.
The police have notified paint maker Tambour Ltd. (TASE:TMBU) that they were investigating suspicions that a great deal of material concerning the company's business was extracted from the computers of ad agencies whose computers were infected by Trojan Horses. The material is suspected of being sent to Nirlat.
There were also developments yesterday concerning Israel's bottled water industry. So far, someone is known to have ordered business information about Eden Springs (Mayanot Eden Ltd.) (TASE:MEYD). The Police Fraud Unit yesterday asked Gaashim Water Products CEO Avi Sasson to hand over his computer, which was suspected of being infected by a Trojan Horse virus. Gaashim, a maker of water purifiers, is a competitor of Tami 4, whose CEO, Dan Taragan, has been questioned under caution on suspicion of industrial espionage against Eden Springs.
Published by Globes [online], Israel business news - www.globes.co.il - on June 1, 2005