Cyber firm Wiz moving funds out of Israel

Israeli cybersecurity firm Wiz is pulling tens of millions of dollars out of Israeli banks, a source close to the company said on Tuesday, joining private sector opposition to the government’s planned overhaul of the judicial system.

The source, who spoke to Reuters on condition of anonymity, said Wiz, a unicorn with a value of some $6 billion, has concerns about growing uncertainty in the Israeli market in light of the proposed changes.

The company will keep its operations in Israel.

Wiz declined to comment on the transfer of money out of Israel which was initially reported by Channel 12 news.

The move follows similar action by local venture capital fund Disruptive AI and Papaya Global, a payments platform unicorn, which last month said they would move bank accounts out of Israel.

The proposed judicial overhaul, which has yet to be written into law, would tighten political control over judicial appointments and limit the Supreme Court’s powers to overturn government decisions or Knesset laws.

Prime Minister Benjamin Netanyahu has said the changes would restore balance between the branches of government and boost business by cutting back on unnecessary litigation.

Two weeks ago, tech executives held a protest against the changes, arguing they would harm democracy, politicise the judiciary and compromise its independence.

Wiz founder Yinon Costica was one of the protesters and he told Reuters he was worried about “abrupt” and unilateral changes to the judicial system which are not backed by wide acceptance.

“Israel has a flourishing tech industry and it took us decades to build. We’ve managed in the past to contend with very difficult security situations and economic slowdowns,” he said.

“The thing that protected us is our strong democracy …and the judicial system.”

S&P Global Ratings has said the judicial shake-up could pressure Israel’s sovereign credit rating and dozens of economists have urged Netanyahu to scrap the plan.

On Monday, Bank of Israel Governor Amir Yaron told lawmakers that institutional independence was vital for Israel’s sovereign credit rating.

In a report to clients, HSBC said the judicial reform could hurt the shekel given outflows after the currency had benefited from massive foreign inflows the past few years.

“The possible weakening of the institutional framework with weaker checks and balances could negatively impact FDI and weaken a key support for the currency,” wrote currency strategist Murat Toprak.

Similarly, JP Morgan likened the situation in Israel to that of judicial reforms in Poland in 2015. “The scale of economic/market impact is difficult to judge at this stage, but it can be a medium-term negative,” it said.

The shekel on Tuesday was down 0.2% versus the dollar and 0.8% weaker so far in February. Reuters