The foreign credit company Bankai Behifing Ahezkot, controlled by Yonatan Cohen, reports a huge projected provision for credit losses and expected non-compliance with financial standards following irregularities discovered in its northern branch. The company reports that the provision in the second quarter reports will be between 80 and 100 million shekels – twice as much as previously estimated – when the suspicion of the company’s management is that a significant part of this amount stems from the direct and/or indirect effects of the many embezzlements made with the company’s funds, which may also have additional effects on its financial results.
“In this matter, it should be noted that as of this date, the company does not have all the information about the above mentioned cases and the company continues to check the data and the findings that emerge from its tests. Accordingly, the company continues to study the issue and examine the incident, in view of the fact that in its assessment a significant part of the provision amounts are based on numerous embezzlements. It should be noted that the company continues active collection operations of the credit portfolio.
“In the company’s estimation, as a result of making the provision, the company will not meet the financial standards towards banking corporations and towards the bondholders in accordance with the trust deeds of the bonds…. In this regard, it should be noted that the company contacted the banking corporations on the subject in order to obtain waivers and/or concessions The financial measure prior to the date of approval of the financial statements and also that in accordance with the decisions of the meetings of the bond holders of the company, it was decided for the time being to instruct the trustee of the bond series not to convene a meeting of bond holders, whose agenda is to present the bonds for immediate payment.”
The expected loss will wipe out the company’s entire equity, which at the end of the first quarter stood at NIS 89 million, while on the other hand it has obligations of about NIS 340 million to bond holders and banks.
my seniors Backing up holdings , past and present, will probably meet soon in court. The foreign bank credit company filed a lawsuit against four former officials of the company, who, according to the investigation of the external auditor hired by the company, are behind the financial irregularities amounting to tens of millions of shekels.
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With the backing of plaintiffs NIS 38 million from the four – the former CEO Ran Kairi; the acting director of the northern branch (where irregularities were discovered) Eyal Rosen; another senior official at the branch who was a senior credit manager who goes by the name of Yoram Eliav; and the company’s legal advisor in 2021-2022, c and Shamma, who also served as the company’s compliance officer.
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The amount is not random, and it reflects the estimate of funds that the company estimates are at risk of being unable to collect due to a series of transactions that took place at the branch located in Kibbutz Mazra. In the backup, they stated that they reserve the right to update the amount of the claim if the tests, which are still ongoing, reveal that the amount of funds is greater. This is at the same time as filing a complaint with the Israel Police against Kairi, Rosen and Eliav “for their actions amounting to extremely serious criminal offenses”.
“The funds were fraudulently transferred to the defendants and their associates”
The statement of claim describes a series of problematic transactions as well as the course of action allegedly taken by those involved. “The subject of the lawsuit is, among other things, the criminal (and criminal) conduct of the defendants who took from the company’s coffers undercover considerable sums that accumulated to tens of millions of shekels, and this by presenting false and false misrepresentations according to which these were legitimate loans given to legitimate customers of the company, while in reality they were not loans to the customers, but in funds that were fraudulently transferred to the defendants, their security personnel and their associates,” they stated in the backing of the lawsuit.
“As it turned out later, the defendants did not spare any means in order to empty the company’s coffers. They used different and unusual methods in order to inflate their pockets at the expense of the company. Rosen, Eliav and Kairi even boasted real courage and fierceness by financing the purchase of various properties registered in their names or in the name of their relatives and associates from collateral money given by the company’s customers to the company in order to guarantee their debt to it. Only a touch of the defendants’ criminal activity has been exposed as part of this lawsuit, as with each passing day more and more of the defendants’ criminal, prohibited and losing actions are exposed, and it shows how far they were The defendants are ready, with the help of Shama Lilach, in order to try and satisfy their greed, which apparently was insatiable,” the lawsuit states.
From a private financial investigation carried out by backup, after the conduct of the defendants was revealed, we learned, among other things, that Rosen, Eliav and Kairi acted to fictitiously register their assets in the names of third parties, including in the name of a company belonging to Kairi, and “that they intend to flee their assets from the country to Dubai, where the members of the conspiracy (Rozen, Eliav and Kairi) own prestigious real estate properties, apparently purchased with embezzlement funds.”
Cultivating relationships with the “right” parties: this is how the embezzlement method worked
According to the indictment, this is how the method of the four involved worked, which they divided with backup into several stages of execution: finding the “correct” timing; Cultivating the “right” relationships with the “right” factors; execution of the fraudulent enterprise; and finally taking camouflage, forgery and cover-up actions.
In the first stage, Rosen, Eliav and Kairi allegedly took advantage of the change of ownership in the company, when Cohen acquired control of it, and the fact that the new controlling owners trusted and relied on the existing management to preserve and maintain the company’s normal operations during their “acclimatization” period.
Yonatan Cohen, owners of Backing Holdings / Photo: Eyal Yitzhar
The backing claims that the three took advantage of this in order to disproportionately and artificially increase the volume of transactions at the branch, while renouncing almost entirely adequate collateral (and sometimes collateral at all), which would guarantee the loans and credit that the company granted almost wholesale to its customers. To this end Kairi took care to cultivate Rosen’s image in Cohen’s ears as a first class professional in the field of non-bank credit.
In the third quarter of 2021, close to the change of ownership in the company carried out in August of that year, the total number of transactions carried out in the Mazra branch increased from 57% of the company’s total activity in the second quarter to 72%. The nominal value of the solo transactions (high-risk transactions in which credit is given based on the customer’s personal collateral only) carried out at the Mazra branch rose from a total of NIS 37 million in the second quarter of last year to approximately NIS 62 million in the third quarter of that year and to approximately NIS 84 million in the last quarter of 2021.
“The connecting line between the things is the desire of the defendants to create out of nothing a false representation of a significant volume of legitimate activity, which will cover the fact that in practice it is a fraudulent enterprise whose entire purpose is to enrich, illegally, the pockets of the defendants, while the defendant (the prosecutor, RA ) has failed in its role and enables the systematic expropriation of the company’s assets”, concluded the first phase in the backup.
Distribute credit to first degree relatives
In support, it is noted that the analysis of the activity of the “customer” Ceramics Fathi Zidan revealed that a transaction was made in the amount of over one million shekels against a check that never reached the company. “And yes, and this is the main thing, because in practice, in contrast to the false misrepresentation presented by Rosen, this is not a loan to a customer, but a transaction that was used by Rosen for the purpose of fraudulently taking money from the company,” the lawsuit explained. In another case, the analysis of the activity of the “customer” Rosbi Ltd. revealed that credit in the amount of over one million shekels was given to a first-degree relative of Rosen – and more precisely, to his father Nir – under unclear circumstances. We note that the company had already reported to the stock exchange about an alleged loan to Rosen’s father count.
Another example reveals that it became clear to the company that between January and April 2022, many cash transactions totaling over NIS 3 million were made at the company’s northern branch, and this when no documentation was found in the company’s systems to support the execution of such transactions.
In addition, in the last few days it became clear to the backup, according to the lawsuit, that Rosen and Eliav took checks deposited by the company’s customers in the company’s trust hands as collateral, and used these collaterals for the purpose of purchasing personal assets. Thus, for example, they purchased a real estate property and building from Mahana Israel Properties on Yitzhak Navon Street in Afula. The property was registered in the name of the Downtown Haifa company owned by Kairi, when “the purchase of the property was financed as stated through securities stolen by the defendants from the company, deducted from by Rosen in the company, and transferred to the Mahane Israel company. From the customer card of Camp Israel in the company’s systems, we learned that between the months of January and May 2022, large amounts were transferred from the company’s bank account to the bank account of Camp Israel, amounting to a total of at least 4.6 million shekels.
“Rosen confessed to the private investigator that he works to smuggle assets”
At the same time as the accounting investigation, a backup private financial investigation was carried out, in order to try and reveal as many details as possible about the actions of the defendants and the assets purchased by them. As part of this investigation, they claim in the backing, Rosen confessed in the ears of the private investigator that after his criminal acts were revealed, he was working to smuggle his assets out of the country by “liquidating” them.
“I’m liquidating a lot of land even now, I’m telling you, I want to get all my money out of the country, I’ve given up. Really, I’ve given up,” Rosen was recorded in a conversation he had with the private investigator at the end of July.
In the statement of claim it is explained that a recorded conversation that took place between Kairi and the private investigator three days before the conversation with Rosen, shows that “Rosen acted to register, fictitiously, assets in the name of unknown third parties, including in the name of Kairi, and this in accordance with the agreements formed between them and as part of the same conspiracy that the two conspired together with Eliav. Not this one either, as appears from the private investigation report, Rosen jointly owns with Kairi, properties in the United Arab Emirates (Dubai), and Rosen intends to sell his property in Dubai in order to avoid his creditors.”
In support, they claim that the company’s former executives violated the duty of care and loyalty and their conduct amounts to fraud. “There is and cannot be any dispute, that the conduct of Rosen, Eliav and Kairi is light years away from the standard of behavior of a reasonable office bearer; Rosen, Eliav and Kairi saw in practice, and certainly could not have foreseen, that their improper conduct would cause considerable damage to the company; and that if the others were And had they acted as reasonable officers, the enormous damages that have been caused (and may still be caused) to the company would never have occurred,” they concluded in the lawsuit.