Knesset panel urges gov't to protect, aid Heftsiba clients
Heftsiba construction company faces imminent collapse leaving clients with loss of funds payed for homes.
The Knesset Finance Committee on Monday called on the government to grant a "safety net" to clients of the Heftsiba construction company, which is in danger of imminent bankruptcy due to heavy debts.
Heftsiba is one of Israel's leading construction companies, reportedly responsible for 10 percent of all building projects in the country. Last Thursday, reports of the company's losses and enormous debt sparked panic among its clients, and prompted dozens of ultra-Orthodox Jews to occupy Heftsiba building projects in several areas across the country.
The Finance Committee convened Monday for an emergency discussion of the affair. The panel agreed that the state must take short-term responsibility over those who paid for homes and may not receive anything in return for their investment. The committee called on the government to formulate a plan to assist the would-be homeowners. The MKs sought to prevent a police evacuation from the unfinished buildings of clients trying to establish ownership.
Knesset Finance Committee Chairman Stas Misezhnikov (Yisrael Beiteinu), said the panel would discuss legislation to protect future home buyers. He added that the banks must investigate how funds were transferred to Heftsiba without guarantors.
Next Monday, the panel will reconvene for a follow-up meeting.
The MKs expressed outrage at the Ministry of Construction and Housing, as well as at the government, for failing to issue warnings regarding the company's grave financial status.
MK Ya'akov Litzman (United Torah Judaism) said that the Construction and Housing Ministry should compensate the clients who could lose their investment, since it had failed to ensure the company was abiding by regulations, thus contributing to the collapse.
Ronit Cohen, who purchased a home in Kfar Yona, broke down in tears and told the committee that her husband is considering suicide. "This is a collapse of three generations, my parents who gave us money for the apartment, my husband and I, who've invested all our savings, and our daughters who also contributed their savings. I work at a supermarket and earn NIS 19.95 per hour," she said.
Ofer Rapaport, who represents some 1,000 families as head of an organization established to uphold the rights of the Heftsiba clients, said it was unacceptable that the ministry failed to inspect the company's activities. "The situation is a catastrophe. More than 50 percent of the residents don't have guarantees or have partial guarantees. We're talking about some 4,000 families who have purchased homes, which is approximately 20,000 people."