Business owners whose actions, either intentionally or through negligence, cause the public monetary losses must bear personal responsibility for the damage and reparations, said Sephardi Chief Rabbi Shlomo Amar in a precedent-setting halakhic ruling (edict based on Jewish law ) issued Wednesday.
The rabbi specified partial defaults (“haircuts” ) in the repayment of publicly held bonds as one type of damage for which tycoons must be held responsible.
The ruling was issued at the request of the Movement for Quality Government in Israel in the hope that it will generate support in the Knesset for the pending business concentration bill, particularly among representatives from the United Torah Judaism and Shas parties.
Rabbi Amar also ruled that tycoons controlling financial institutions are forbidden to invest in non-financial enterprises. “It is human nature for one to, first and foremost, look after himself,” he said. “Therefore, permitting cross holdings is in effect equivalent to placing an obstacle in the path of a blind man. For that reason, cross ownership is, for all practical purposes, forbidden. Its enjoyment is considered an offense and a crime, a very serious matter that is unacceptable.”
In the opening to his ruling Rabbi Amar stated: “Controlling owners of public financial organizations and all who do their bidding, including bank and pension fund managers, are obligated to manage the funds deposited in their hands with integrity and honesty. They are forbidden to invest these funds in their own companies or those they manage, since they profit or benefit from doing so.”
Addressing a press conference held in his chambers, Rabbi Amar stressed that he decided to approach the subject due to his deep concern for the financial well-being of the country and its citizens, and the welfare of Israel’s poor in particular.
The rabbi expressed his worry over the pension savings of the general public, saying: “There are working people who, despite the fact that they work, don’t manage to make a living. This is something that must be battled,” adding that after examining the issue he looked into the text of sources in the Torah.
Rabbi Amar also expressed his support for the pending business concentration bill. “I support any law meant to straighten out livelihoods and promote legal conduct,” the rabbi said, adding that he had already presented the ruling to Knesset members from the Likud and Labor parties and received the impression that there’s a great deal of sympathy for this issue.
Attorney Eliad Shraga, chairman of the Movement for Quality Government, said he hopes the United Torah Judaism and Shas parties will heed the rabbi’s words and make the right decisions about concentration and haircuts.
“We approached the rabbi because the tycoons, beyond building ‘pyramids’ and raising the cost of living, performed ‘haircuts’ on the public’s pension funds,” he explained. “All this is happening because of those same pyramids and oligopolies ransacking the public’s money,” explained Shraga.