By Pesach Benson • May 31, 2026
Jerusalem, 31 May, 2026 (TPS-IL) — Former Israeli Finance Minister Moshe Kahlon was convicted on Sunday by the Tel Aviv District Court of a securities reporting offense committed during his tenure as chairman of Unet Credit. The ruling followed a plea bargain in which he admitted to the charges.
Under the agreement, Kahlon is expected to receive a suspended prison sentence, pay a fine of NIS 180,000 ($61,600) and face an 18-month prohibition on serving as an executive or director in a public company.
The case centers on Unet Credit, a publicly traded non-bank lending company where Kahlon served as chairman from mid-2021 until mid-2022. Prosecutors say he failed to ensure that major financial problems uncovered at the company’s Nazareth branch were promptly reported to shareholders and regulators.
According to the indictment, company officials became aware of growing irregularities during 2021. These allegedly included missing checks worth millions of shekels, fabricated financial transactions and disputes over funds handled by branch manager Itzik Avnater. Authorities suspect losses at the branch totaled roughly five million shekels.
Investigators say compliance officer Yoav Tzabar briefed Kahlon in January 2022 about severe financial discrepancies, including a reported NIS 10 million ($3.4 million) shortfall tied to missing checks and questionable transfers of company funds. Rather than immediately informing the board, Kahlon allegedly urged company officials to resolve the matter quietly and shut down the branch.
The indictment claims Kahlon warned that disclosing the irregularities too quickly could spark a damaging “chain reaction” for the publicly traded company. Prosecutors further allege that Unet Credit’s board later approved financial reports without receiving complete information about the scope of the problems uncovered in Nazareth.
Kahlon’s plea deal was filed together with a broader indictment against several senior figures connected to Unet Credit. Among those charged are controlling shareholders Tzachi Azar, Shlomo Isaac and Shai Penso, as well as companies linked to them and additional associates.
The three businessmen are accused of fraud, corporate breach of trust and securities-related reporting offenses tied to two separate alleged schemes.
One case focuses on a 2020 stock allocation transaction involving approximately two million company shares valued at around NIS 50 million ($17.1 million). Prosecutors allege the defendants falsely presented the purchase as being financed through outside funding sources connected to the controlling shareholders.
Instead, investigators claim the transaction was secretly financed using Unet Credit’s own money through a circular arrangement designed to conceal the true source of the funds. Prosecutors say the maneuver enabled the defendants to obtain shares worth tens of millions of shekels under false pretenses.
A second part of the investigation concerns the Nazareth branch affair and allegations that senior company officials concealed the financial misconduct from both directors and the investing public for an extended period.
The case has drawn widespread attention in Israel because of Kahlon’s former role as finance minister and his previous reputation as a champion of economic reform and consumer protection.
