Israeli Hi-Tech Executives: Legal Reform Will Harm Business

Senior managers in Israeli venture capital funds that invest in Israel have warned that the new right-wing Government’s plan to reform the judicial system could harm the business climate and drive investors away. Barak Eilam, CEO of Nice, wrote in a letter to his employees that venture capital investors are hesitant to take risks in a business environment that differs from what is typical in countries with a liberal democracy and a clear separation of powers.

He claims that the major concern for investors is the potential lack of independence in the court system, which could make it difficult for them to seek justice when necessary. This could lead to a decrease in demand for investments and lower values for Israeli companies, resulting in lower taxes and income for the state. Additionally, even companies that do not rely on external investments may find themselves losing customers to competitors from more liberal countries.

VC Fund TLV Partners issued a public letter in which the four partners wrote: “The high-tech industry flourishes on the ground of freedom of expression, support for progress and encouragement of creative thinking. It flourishes in a place where people have rights and freedoms – after all, the high-tech industry is nothing but A mosaic made up of the people who work in it. These are all necessary values that the current government is trampling on. The current measures designed to paralyze the justice system and blatantly violate the balance between the authorities, do a fatal harm to democracy. This harm has meaning both in terms of human rights, and also in systemic aspects of proper administration”.

The proposed reform in the judicial system relates to the Superseding Clause which will allow the Knesset, with a majority of 61 members of the Knesset (subject to coalition discipline), to enact any law and pass it – no matter what its content is and how offensive, radical or alienating it is – without the court being able to criticize it or Even to moderate it.





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