On Tuesday, the securities regulators in Israel conducted a raid on a lending company over suspicion that it falsified documents, defrauded its clients and stole millions from its customers.
Series of scandals
A non-banking finance company, Unet Credit has been involved in a series of scandals in the last year. One of its board members is Moshe Kahlon, the former finance minister of Israel. Last month, Kahlon had resigned after news of alleged criminal activities had surfaced. He will also be questioned as part of the investigation.
The authorities’ attention was attracted towards the company after the number of scandals about discrepancies in funds had been reported. On Tuesday, four senior members of Unet Credit were arrested by the authorities.
These included the controlling shareholders Shai Penso and Shlomo Isaac, Yitzhak Eviatar, the Nazareth branch head and the former chief executive, Yitzhak Ezer. A court released the company members under restrictive conditions, which included a restraining order that prevents them from leaving the country for 180 days.
According to the allegations of the Israel Securities Authority, the suspects were guilty of fraud and had forged documents and falsely registered the company’s documents to conceal their activities from the company as well as the public.
Furthermore, the authority alleged that transactions in the shares of the company had been conducted via the private account of the former CEO Ezer. He had paid the money, along with Isaac, into the accounts of a private company under their control and had used inside information for doing so.
The attorney for Shlomo Isaac, Eran Shaham-Shavit asserted that his clients was cooperating with the investigation. He added that his client believes in the company and that it can again return to a profitable and successful direction.
There have been losses of millions of shekels for the company in funds, which include missing checks worth NIS 10.6 million. In addition, it is unable to collect a loan given in Nazareth to Zoabi Holdings worth NIS 37.5 million.
On Tuesday, Unet also disclosed that its books had yet another inconsistency. This was a transaction made to a private company worth NIS 50 million, which had not been approved in accordance with the law and neither had it been disclosed to the public.
The main branch of Unet in Holon was also robbed back in May when robbers had come in disguised as food deliverymen and had walked away with NIS 3.5 million. Former company executives had suspected that the robbers may have had inside help.
Last month, an internal audit was conducted, which discovered that there was a discrepancy in Unet’s books worth NIS 7.7 million. Two weeks after the audit was done, Kahlon announced that he was stepping down from his position.
He had asserted that there was a lot of financial exposure where the company was concerned and he further said that this was because of events that had occurred before he had become a member of the company’s board.