The Investigations, Intelligence and Trade Control Department of the Israel Securities Authority transferred the investigation file regarding Yount Credit Financial Services Ltd. to the State Prosecutor's Office. It is suspected that Moshe Kahlon, who served as chairman of the board of directors of the public company, committed, inter alia, reporting offenses under the Securities Law and offenses of fraud and breach of trust in the corporation under the Penal Law.
It is also suspected that the company's controlling shareholders, Yitzhak Azar, Shai Penso, Shlomo Isaac, committed violations of the Securities Law and the Penal Law, including reporting offenses, use of insider information, theft by an authorized person, receiving fraudulently under aggravated circumstances, forgery, false registration in corporate documents, fraud and breach of trust in the corporation, obstruction of justice and money laundering. In addition, it is suspected that senior officers of the public company, including Yoav Sabar, deputy CEO and compliance officer, David Ben Naim, who served as CFO and advisor to the public company, and Moshe Kahlon, committed reporting offenses under the Securities Law, and fraud and breach of trust in the corporation under the Penal Law.
Minister Yisrael Katz replaced Moshe Kahlon in the Ministry of Finance
This investigation file is fraught with multiple affairs, centered on two main cases in which the controlling shareholders are suspected of involving the assistance of other parties, who, according to suspicion, stole money fraudulently transferred from the public company to the private company amounting to tens of millions of shekels.
The first case concerns an allocation transaction in which 2 million shares of the public company were issued and transferred to the private company, in exchange for which the controlling shareholders were supposed to inject NIS 50 million in money into the public company. It is suspected that the main purpose of the transaction was to find a solution to the problem of paying the bonds of the private company, and that the allocation transaction, which was presented to the board of directors and the general meeting as a transaction of shares for cash, was fraudulent and that the private company and the controlling shareholders did not have the capital to both repay the bond payments and purchase the shares.
Shlomo Isaac. Suspected of violations of the Securities Law and the Penal Law, including reporting offenses, use of insider information and more, Photo: Alan Shaver
According to suspicions, the controlling shareholders, assisted by other suspects, including Ben Na'im, planned a deal whereby they could receive shares of the public company without any actual payment of cash for those shares, but by artificially transferring money back and forth from the public company to the private company, transferring a number of problematic borrowers from the private company to the public company, with the plan being to sell in the future some of the shares they received in the allocation at a higher value, and thus return the bond payments of the private company. According to the aforementioned suspicion, the controlling shareholders with the assistance of other parties deceived the public company and made false representations during the approval of the transaction and in the period thereafter, when in fact they received financing from the public company to purchase the shares without any consideration without proper approval, and without the matter being reported to the public.
In the second case, it is suspected that the controlling shareholders unlawfully received at least NIS 2.4 million from the public company. In addition to the aforementioned NIS 2.4 million, additional sums missing from the northern branch of the public company totaled NIS 10-15 million. It is suspected that the controlling shareholders and other officers, including the company's chairman of the board Moshe Kahlon, Yoav Sabra and his uncle Ben Naim, knew in real time but did not report to the board of directors about the severe shortages and irregularities in the northern branch of the public company, including two checks totaling NIS 5 million, at least some of which were transferred to the controlling shareholders.
Mr. Moshe Kahlon's lawyer, Nati Simhoni, said in response that he welcomes the conclusion of the investigation and the transfer of the case to the State Prosecutor's Office, and that he is confident that at the end of the day, the State Attorney's Office will close the case and reach an informed decision according to which Mr. Kahlon did not adhere to any flaw.
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