The government committee tackling economic concentration would give too much power to minority shareholders, Alony Hetz Properties and Investments said this week in an opinion paper.
"Strengthening corporate governance by having almost every significant routine management decision dealt with by the minority contradicts the rationale by which responsibility for these matters rests - with the board," Alony Hetz said in a paper.
"As a result, the most significant decisions will be the ones decided on by the minority shareholders. This is an unprecedented administrative absurdity."
The company proposed that public subsidiaries of public companies - defined as "wedge companies" by the committee - be required to have a majority of independent directors. This, it said, would make most of the committee's proposals on this subject redundant.
"If these recommendations go into effect they will seriously damage the proper running of many public companies and create havoc in most of Israel's business sector," the company said.
Alony Hetz makes income-generating real estate investments in Israel, Western Europe and North America. The company holds majority control over Amot Investments, which would be considered a wedge company under the concentration committee's definition.
The company warned that under the recommendations, major management issues at wedge companies would be in the hands of random minority shareholders whose interests may not be compatible with those of the firm.
"How can the best interests of investors be served if the company's interests are hurt?" Alony Hetz said. "Harm to so many companies will have adverse macroeconomic implications by damaging growth rates, employment, investments and consumption."
The company's position was endorsed by its board including controlling owners Aviram Wertheim and Nathan Hetz and external directors Yarom Ariav and Itzhak Forer. They did not forget to acknowledge the concentration committee's importance.
"The concentration committee boldly characterized several major failings of the Israeli economy - first and foremost it is a small economy suffering from low competitiveness in certain areas, harming citizens' welfare," Alony Hetz said.
"The limited number of players in the economy and their distribution over a large and varied range of activity also generates concerns - as the committee rightfully pointed out - about low economy-wide competition between the groups. This has negative implications on productivity, growth and consumers' well-being."
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