Concentration panel takes aim at Israel's tycoons
Israel's economic leaders, from Netanyahu down, have accepted that Israel has a serious case of economic concentration.
When the so-called economic concentration committee was launched a year and a half ago, pundits scoffed that the absence of the word "concentration" in its charter meant Israel didn't have such a problem. Clearly the prime minister thought as much, they shrugged.
A year later, as the committee meandered on, the cost-of-living protest exploded, ending the denial once and for all. Netanyahu urged the committee to crack down hard.
At the press conference on Tuesday, the word "concentration" was mentioned a lot. Israel's economic leaders, from Netanyahu down, have accepted that Israel has a serious case of economic concentration, a disease that's jacking up the cost of living, a disease warping the allocation of resources, a disease causing and widening social gaps and imperiling the very fabric of democracy.
The main, and practical, part of the report requires big business groups to choose between owning finance companies (banks, insurance companies or investment houses ), or non-finance companies (industry, telecommunications, real estate, retail, services and so on ). Groups that own both will have to sell one or the other within four years (for more on that, see page 12 ).
The committee set clear criteria that leave no doubt which business groups can mosey on as usual, and which have to choose and divest. For instance, a finance company is considered "significant" (and therefore subject to the new rules ) if it has more than NIS 40 billion of the public's money under management in some form. For the purposes of the new rules, a non-finance company is "significant" if its sales are more than NIS 7.5 billion a year, or it owes more than NIS 7.5 billion.
So who has to restructure, and who doesn't? Nochi Dankner, owner of the IDB group, does. IDB owns a host of service and industrial companies, and also owns Clal Insurance. Yitzhak Tshuva , owner of Delek Group, does. He also owns the Phoenix insurance company and the Nessuah Zannex investment house. Zadik Bino has to restructure too: he owns Paz Oil and the First International Bank of Israel.