Kohan Properties Ousts Founder Mike Kohan Over Misappropriated Funds

Kohan Properties has removed its founder and controlling shareholder, Mike Kohan, from his role as president and revoked his signing authority following revelations of further misappropriation of company funds. This action comes after a series of discoveries detailing Kohan's misuse of millions of dollars raised through the company's bond issuance.

Initially, in July, the company disclosed that Kohan had used $9.6 million from bond proceeds for personal loans on non-company assets. This followed a similar scandal involving another BVI-registered company, Simed, which had raised funds in Israel and whose controlling shareholders were found to have pocketed tens of millions of dollars. These incidents created a crisis of confidence in BVI-based companies among investors.

At the time, Kohan had called the initial misuse a "honest mistake" due to an inadequate management structure, promising reforms. However, a subsequent investigation by Kohan Properties, prompted by the Israel Securities Authority, revealed that the total amount Kohan owed the company had risen to $15.5 million, with some of the misuse occurring even after the initial disclosure. He was left owing $3.8 million, which he committed to repay by the end of August.

Further complications arose in early September when the company reported Kohan's debt had increased to $4 million. He repaid half immediately and pledged to settle the remainder upon completing a real estate asset acquisition. The situation escalated again when the company discovered an additional $2.7 million debt, which Kohan subsequently repaid. He also transferred the rights to the acquired real estate asset to the company, offsetting his remaining debt.

In response to the ongoing issues, the company's board, led by Tzufit Harel, decided to terminate Kohan's presidency and remove his signing authority. Ran Ben Daniel, previously appointed as CFO and interim CEO, will now be the sole authorized signatory. Kohan, whose original name is Mehran Kohansieh, is an Iranian-born Jewish businessman based in the US, who founded Kohan Retail Investment Group, holding 35 income-producing properties in the US valued at $710 million.