TEL AVIV — Moshe Kahlon was convicted of failing to ensure that serious financial irregularities at UnetCredit were properly reported to the public while he served as the company's chairman. The conviction resulted from a plea agreement filed alongside a broader indictment in the UnetCredit case.
Under the plea agreement, Kahlon admitted to violating reporting duties under the Securities Law. The deal remains subject to court approval. The sides will ask the court to sentence Kahlon to a suspended prison term, a NIS 180,000 fine, and an 18-month restriction on serving as an officer in a public company.
Kahlon was chairman of UnetCredit Financial Services from June 2021 until his resignation in June 2022. UnetCredit was a public company that provided non-bank credit and whose shares were traded on the Tel Aviv Stock Exchange.
The case centers on what prosecutors describe as a pattern of concealment, circular financing, and misuse of the public company’s funds by controlling shareholders and other senior figures. At the center of the case is a 2020 share allocation deal.
According to the indictment, UnetCredit allocated two million shares, worth NIS 50 million, to the private company controlled by its controlling shareholders and to several advisers. The deal was presented to the company’s institutions as if the money used to buy the shares would come from outside sources connected to the controlling shareholders.
Prosecutors allege that the public company’s own money was routed through a circular transaction, creating the appearance that the private company had paid for the shares. They further allege that the public company funded the purchase of its own shares, enabling the controlling shareholders and others to fraudulently obtain shares worth tens of millions of shekels. The indictment says the affair reflected the mixing of the controlling shareholders’ private business interests with the public company's affairs, while concealing critical information from the company’s board, committees, and shareholders.