Knesset to vote on law tightening pyramid structure of Israeli businesses

Knesset to vote on law tightening pyramid structure of Israeli businesses

Lawmakers agree to give holding groups six years to dismantle excess layers of their “pyramid” structure after the bill becomes law.

By Zvi Zrahiya | May.21, 2013 | 9:11 AM

The Knesset Finance Committee is scheduled to vote on Tuesday on the Business Concentration Law, after lawmakers agreed to toughen its terms to permit no more than two tiers of chained ownership, committee chairman Nissan Slomiansky ‏(Habayit Hayehudi‏) said Monday.

However, lawmakers agreed to give holding groups six years to dismantle excess layers of their “pyramid” structure after the bill becomes law. That is two more years than the government panel proposing the law wanted to allow. That panel had also proposed limiting pyramids to two tiers only for new holding groups, while letting existing groups retain three.A behind-the-scenes battle has developed over the past few days between the Finance Committee and the government over the toughened measures the committee wants to inject into the bill. Finance Minister Yair Lapid, Economics and Trade Minister Naftali Bennett and Justice Minister Tzipi Livni aren’t expected to favor pulling the bill from the Finance Committee. But the Prime Minister’s Office refused to disclose Prime Minister Benjamin Netanyahu’s position on these issues.

On Sunday, the Ministerial Committee for Legislation authorized Netanyahu, Lapid, Bennett and Livni to determine the government’s stand on the more stringent terms the Finance Committee has introduced into the bill. Netanyahu was added at the last minute and will head the panel.

MK Zahava Gal-On ‏(Meretz‏) voiced concern that the government might pull the toughened legislation. “Does it seem coincidental that the prime minister joined the ministerial committee?” she asked.

But Slomiansky said on Sunday that he was optimistic about the legislation. “The government wants us to work quickly on the bill and isn’t threatening to retract it,” he said.

Representatives of the business tycoons and others who had appeared before the Concentration Committee were also invited, but the only one who showed up was Natan Hetz, CEO of Alony Hetz Properties & Investments, who objected to allowing pyramids only two tiers.

“I felt I was walking into a done deal,” said Hetz. “Two layers shouldn’t be decreed in one fell swoop. You don’t exactly grasp the implications.”

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: