The Israeli economy is entering a new era: The Knesset Finance Committee unanimously voted on Tuesday on legislation that would limit the size of large conglomerates.
In Israel such organizations are commonly referred to as "business pyramids" because of the way they are structured and the cross-holding that typically takes place among its tiered subsidiaries.
The measure, which is part of a still-pending bill dubbed the Economic Concentration Bill that must go through two more Knesset plenum votes before enactment, would require all conglomerates to have no more than two tiers of subsidiaries. It is scheduled to take effect within four to six years.
Both opposition and coalition members voted in favor of the restrictions, paving the way for a final passage in the Knesset plenum.
The government proposal to allow existing companies to retain three tiers while limiting new companies to two was denied by the committee. A transition period of up to four years to dismantle the extraneous tiers from the fourth down was alloted, and up to six years to dismantle the third level (instead of 6-8 years the government proposed).
The committee also imposed limits on leveraging activity. .
"We are now tackling a reality in which 10 families have control over the entire economy and we will make sure this is no longer the case," Committee Chairman Nissan Slomiansky said at the meeting