B.S.T. Real Estate Chair Addresses Financial Irregularities, Calls Them a 'Mistake'
Rafi Bisker, chairman of the B.S.T. real estate group, has publicly addressed financial irregularities within the company for the first time, characterizing the issue as a "mistake." The irregularities, revealed in recent weeks, involved the company's controlling shareholders allegedly diverting company funds to their private accounts. Speaking at an investor call coinciding with the release of the company's first-half financial reports, Bisker explained that the incidents occurred when the company was still private in 2025. He stated that controlling shareholders used company funds for work on their private properties, with the company covering the expenses without charging the shareholders.
Bisker emphasized that while the quantitative amount of funds involved was not substantial, its qualitative impact was significant. He initiated a thorough investigation upon learning of the matter, appointing an independent examiner with full authority, including investigative powers and access to company records. The company also proactively contacted the Israel Securities Authority, coordinating its public disclosures with the regulator. Bisker confirmed that once the sums were identified, they were returned to the company "unquestionably and with maximum interest." A supplementary review did not uncover any additional sums beyond those already returned.
He stressed that the repayment was only the beginning, with the primary focus being on preventing future occurrences. The company plans to strengthen controls over payments and work with subcontractors, establishing stricter rules for any expense or transaction involving personal interests of stakeholders. Bisker attributed the lapse to the company's transition from a private entity of fifty years to a public one, noting the incidents happened before the company had its first board report. Since then, two external directors have been appointed, a three-member audit committee formed, and the board was presented with the examiner's report.
Elias Tanous, the group's CEO and owner, apologized for the "malfunction." A draft report from the external examiner indicated that approximately NIS 2.2 million (later revised to NIS 2.3 million with interest) was paid from a subsidiary's funds to accounts linked to controlling shareholders and their relatives for private work performed by subcontractors on their properties. These payments, contrary to initial reports, also occurred between September 2025 and June 2026, extending into the period after the company became public. Consequently, B.S.T. will re-publish its 2025 and Q1 2026 financial reports.
Despite the irregularities, the company's management stated that its ability to raise capital has not been affected, citing broad trust from the banking system and capital markets. The company also reported an order backlog of NIS 6.2 billion, equity of NIS 1.1 billion, and cash reserves exceeding NIS 800 million. The irregularities surfaced after B.S.T. completed its IPO in May at a valuation of approximately NIS 2.9 billion. The company's stock has seen a moderate decline since its early June listing and is currently trading at a valuation of NIS 2.8 billion.
