MK Avishay Braverman (Labor) submitted legislation that is meant to limit the sale of Israeli companies to foreigners in light of Tnuva’s potential sale to China’s state-owned Bright Foods company.
Braverman’s proposal would require a committee appointed by the Economy Minister to regulate foreign purchases of Israeli companies and ensure a seed of Israeli control in essential industry.
The legislation would apply to the sale of any company with 1,000 or more employees or that receives NIS 5 million or more of aid from the government. If the committee finds that the deal would harm the public interest, then it may block it.
“Unlike Israeli industrialists, foreign managers may not give enough weight to matters that are important to Israelis, like encouraging local manufacture, local employment, workers’ rights and competition,” Braverman said.
The Labor MK gathered 46 signatures on his bill, including opposition chairman Isaac Herzog (Labor), Knesset Finance Committee chairman Nissan Slomiansky (Bayit Yehudi), Knesset Labor, Health and Welfare Committee chairman Haim Katz (Likud) and several other coalition MKs.
“Large corporations in the market have knowledge and strategic assets and employ tens of thousands of workers. We need to make every effort to keep them in Israeli hands,” Braverman said.
In April, Canada’s PotashCorp. dropped a bid to acquire Israel Chemicals over fear that the company would close down plants in Israel and move operations across the border to Jordan, leaving hundreds of families in the Negev unemployed.
Israel’s Potash, critics said, were a natural resource that should benefit the nation, not be put on sale to foreign corporations.
Israel would not be the first country to regulate foreign ownership of strategic markets. In the United States, for example, the FCC must approve sale of more than 25 percent of a television or radio broadcasting company to foreigners.
Yoav Chelouche, a managing partner at Aviv Venture Capital, said that though Israel suffers from over-regulation, such a committee would probably not affect most businesses. “We have exits every year, most of them wouldn’t fall under the category of being strategic or a monopoly or a national treasure.”