Business Partner Admits Embezzling Millions, Partners Conceal Affair
In December 2019, a tense meeting took place in a Tel Aviv law office involving senior lawyer Hillel Kobrinsky, businessman and former political campaign manager, Erez Alrai, and Ronen Elad, then CEO of the EAK Holdings group. The lawyer revealed that EAK had discovered Elad had taken millions of shekels from the company, with the exact amount estimated between 9 and 15 million shekels. Funds were allegedly transferred to Elad's wife, for properties in Greece, and for the acquisition of the Shufra retail chain, a deal Elad conducted independently in late 2017. Elad also allegedly funneled money to joint companies with external investors and other entities under his control.
Initially, Elad denied the accusations, questioning the transfer of funds to his wife. However, under pressure from the lawyer and his partners, who presented evidence including financial records, Elad was reportedly brought to admit to the transfers. The partners, Kobrinsky and Alrai, expressed a desire to resolve the matter discreetly to avoid ruining Elad's life, despite the severity of the findings, which included funds going to companies involved in public offerings. Elad was presented with a draft agreement and requested 24 hours to consider it.
The following day, Elad met with Kobrinsky and Alrai without lawyers present. He apologized, attributing his actions to being "confused by the numbers" and wanting to "impress" them with better results. He then proposed buying out his partners' 65% stake in the company. Kobrinsky and Alrai agreed, on the condition that Elad immediately return the embezzled funds and purchase their shares based on a company valuation of 43 million shekels. An agreement was signed in late December 2019, detailing Elad's "forbidden withdrawals" between 2016 and 2019, totaling over 9 million shekels according to the partners' current understanding, though Elad admitted to a slightly lower amount in the agreement. The deal stipulated that Kobrinsky and Alrai would refrain from reporting him to the authorities, provided he fully complied with the terms.
Elad, a former naval commando and part-owner of a football club, has since continued his business career. While his acquisition of the Shufra chain did not succeed, he has made other investments, including in drone company Aerodrom, where he is now chairman. Notably, he recently received court approval to acquire a wet wipe manufacturer for 178 million shekels. Aerodrom is currently facing a demand for compensation from the Ministry of Defense. A representative for Elad stated that the matter was a business dispute between partners from eight years ago that was resolved through a quick settlement, denying any improper business conduct and questioning the timing of the issue's resurfacing.
