search
Amid outrage, MK demands all payments to Fox be frozen

‘Swinish capitalism’: Fox, which got millions in virus aid, pays huge dividends

Fashion chain’s CEO Harel Wiesel led campaign to secure gov’t grants for big businesses, reportedly getting over NIS 13m; now it is handing out NIS 49m in benefits to shareholders

File: CEO of Fox Group Harel Wiesel (Moshe Shai/FLASH90)
File: CEO of Fox Group Harel Wiesel (Moshe Shai/FLASH90)

Politicians from across the political spectrum expressed outrage Thursday over news that fashion chain Fox will hand out NIS 49 million ($14 million) in dividends to shareholders, mere weeks after its CEO pressured the government into supplying billions in aid to big businesses for coronavirus recovery.

Fox Group chief Harel Wiesel had led the campaign by large businesses, which included threats of continued closures of large sectors of the economy, to secure NIS 6 billion ($1.7 billion) from the government to help hundreds of large businesses return employees to the workforce.

Fox itself is believed to be receiving some NIS 13-18 million out of the arrangement. But on Thursday the company, reporting its second quarter earnings, announced it would hand out far 3-4 times that amount in dividends.

Wiesel and his company were swiftly excoriated from both the coalition and the opposition.

“This is swinish capitalism at its most brazen,” Economy Minister Amir Peretz (Labor) tweeted. “After bringing back hundreds of workers on a part-time basis [only], he is paid from the state coffers and takes tens of millions into his pocket.”

Likud MK Shlomo Karai was also indignant. “The crocodile tears Wiesel shed everywhere have become diamonds, at our expense. What we most feared has happened. We compromised at the Finance Committee on amendments and improvements to the benefits model so as not to delay it, and to save independent businesses, and we’ve received a slap in the face in return. This won’t happen again.”

A Fox store in Jerusalem (Wikipedia)

MK Bezalel Smotrich of the opposition’s Yamina tweeted: “The fastest ‘Told you so’ ever. This was not the intended purpose of the huge sum provided to support businesses during the coronavirus crisis.”

Labor MK Merav Michaeli sent a letter to Finance Minister Israel Katz demanding the he freeze all benefits to Fox and to set conditions to receive the aid. She said the government should “act immediately to ensure that grants or loans and any other financial aid from public funds will be conditioned on an obligation not to hand out dividends and not to raise [management’s] salaries for at least two years.”

MK Micky Levy of Yesh Atid-Telem blamed the government, saying he had sought changes to the grants program, including an NIS 6 million ($1.7 million) ceiling to any one business, but “the government and its representatives shut their ears and opposed any changes.”

“Unfortunately the government obduracy that has been on display throughout the economic crisis has brought about this ugly and unbelievable result,” Levy said.

The government decision in late April to distribute the funds to large businesses came after major chains refused to reopen since they hadn’t received the same level of government support that small businesses and self-employed Israelis got.

The major employers had applied intense pressure on politicians to compensate them as well as small businesses.

Wiesel, in response to the umbrage, on Thursday told Channel 12: “The company is distributing to shareholders, of which I am just a small part, 50% of its profits, and no more than that. When the shutdown was decided on in March, in an unusual move, we informed the stock exchange that we were freezing the distribution of dividends that we had announced, because we didn’t know how long the economy would be closed.”

“Since the stores opened, there has been a significant increase in sales and we decided to cancel the freeze,” Wiesel said. “When the stores closed I announced that I was giving up 100% of my salary, and only after I brought back the last of the workers, out of 8,500 that I employ, I announced that I would start to receive my salary again.”

Wiesel himself notably entered into an on-air clash with Prime Minister Benjamin Netanyahu’s economic adviser earlier in April over the economic assistance to Israeli companies.

Harel Wiesel, left, and Avi Simhon arguing in the Channel 12 studio on April 13, 2020. (Screen capture: Channel 12)

Wiesel confronted Avi Simhon about a fund set up by the government to help small businesses survive the crisis, castigating officialdom and shouting at Simhon for the government’s ostensible failures.

“The problem with you is that you’re at the end of the line because you’re very, very rich, very, very successful,” Simhon quipped at him.

As the argument grew more heated, Wiesel repeatedly interrupted Simhon, and began to lean in closer toward him.

With the two yelling at each other, Simhon suddenly turned his face away. “I really hope you don’t have the coronavirus because you just spit on me,” Simhon told him.

Wiesel offered a brief apology before they continued the argument, with the Fox executive continuing to take exception to being called rich.

read more:
comments