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IDB CEO Nochi Dankner Photo: Motti Kimchi
IDB CEO Nochi Dankner Photo: Motti Kimchi
 
 

Finance panel okays plan to end economic concentration

Bill aimed at breaking up large conglomerates in Israel approved by finance committee, to be transferred for final vote with Knesset plenum in coming weeks

Reuters
Published: 11.26.13, 15:15 / Israel Business

Israel's parliamentary finance committee gave final approval to a plan aimed at halting pyramid structures at companies and breaking up large conglomerates blamed for high living costs.

 

The bill won initial legislative approval more than a year ago but final approval has been delayed by a general election held in January and months of work to approve a state budget.

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The full plenum is slated to hold a final vote on the measure in the coming weeks, a finance committee statement said.

 

Key measures in the bill include limiting the number of layers permitted in a pyramid-type holding company in the next four to six years. Formation of new pyramids will be banned.

 

Some committee members expressed concern that in an ongoing debt settlement involving IDB Holding, potential new investors have proposed adding layers to IDB, already considered Israel's most complex pyramid.

 

The bill also proposes barring companies from holding a financial firm with assets exceeding 40 billion Israeli shekels ($11.2 billion) at the same time as non-financial assets with more than 6 billion shekels of revenue.

 

"We have radically changed the structure of Israel's economy and adapted it to the needs and real interests of the public," said finance committee chairman Nissan Slomiansky.

 

Israel has one of the highest concentrations of corporate power in the developed world with the government estimating that its largest business groups control 41 percent of the market value of public companies.

 

The measure was introduced after the nation was shaken by hundreds of thousands of social protesters taking to the streets in 2011 in demand of lower prices for housing and other basic goods.

 

 

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