Carmel Shama-Hacohen
Carmel Shama-Hacohen Photo by Emil Salman
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The Knesset Economics Committee devoted its attention yesterday to the latest fashion on the stock market - the haircut, which is when a company's owners announce they won't repay bondholders in full and offer an alternative. "The stock market has turned into a beauty salon," snorted committee chairman Carmel Shama-Hacohen (Likud ), who had called the special session on behalf of the investing public.

He had called the session to discuss looming default by two of Israel's biggest business barons - Yitzhak Tshuva and Ilan Ben-Dov. Both were summoned to attend the session. Neither showed up.

Shama-Hacohen is sponsoring a bill that would force the controlling shareholders of a company in default to return any dividends, bonuses and pay they received from that company during the four years before the default. Shama-Hacohen intends to present the bill to the Knesset during the winter session.

Yesterday he described the bill's guidelines to the committee.

The subjects of discussion were the looming default by Delek Real Estate, controlled by energy and property baron Yitzhak Tshuva's Delek Group. The other is Tao Tsuot, a company controlled by Ilan Ben-Dov, who also owns the controlling interest in Partner Communications.

"It doesn't add up for tycoons to build mansions worth millions [Ben-Dov] and hold weddings that cost millions [Tshuva, for his son Elad], and then deliver investors a haircut," Shama-Hacohen said. "Too many haircuts loom in the near future. The stock market seems to have turned into a beauty salon."

MK Shelly Yachimovich (Labor ) chimed in with the anecdote of Lev Leviev, controlling shareholder of Africa Israel Investments, who has also attacked bondholders with scissors - while "building the most expensive home in the history of Britain" in London, she said. "It cannot be that Ben-Dov, while shaving 50% of investors' savings in Tao, builds a mansion in Kfar Shmaryahu."

While on the subject of Ben-Dov, Yachimovich said his talent "begins and ends with the capital market's astonishing willingness to give him the public's money." That has to end, she said. "The solution is very simple. Anybody who doesn't meet his bond liabilities has to be barred from raising more money from the public through bonds, until he's returned the money."