Kohen Propertis Owner Apologizes to Investors After Misuse of 30 Million Shekels
Mike Kohen, controlling owner of Kohen Propertis, addressed investors following revelations that he used nearly 30 million shekels (approximately 9.6 million USD) to repay loans on assets not owned by the company. In a call organized by IBI Underwriting, Kohen described the incident as an honest mistake stemming from a management structure unsuited for a public company and expressed regret for the breach of trust. He assured investors that the funds were returned and pledged an additional 4.5 million USD if any discrepancies remain.
The controversy emerged after the company disclosed the unauthorized use of funds from a bond issuance totaling 412 million shekels raised from Israeli institutional and other investors this year. Kohen Propertis confirmed ongoing investigations and acknowledged additional transactions involving companies owned by Kohen, with repayments made to the company. To restore confidence, Kohen announced a recovery plan including appointing a compliance officer and an Israeli CFO familiar with the local bond market, expanding management to ensure covenant compliance, timely reporting, and payments.
The issue surfaced following a Securities Authority inquiry about the identity and connections of an investor linked to Kohen's controlling interests. The inquiry revealed involvement of a company controlled by businessman Uri Eisenberg, son of Shlomo Eisenberg, a major shareholder in Yesras and Malam Team. This company had provided a 4.7 million USD loan to address covenant breaches on one of Kohen Propertis’ assets, while bond proceeds were also used to fully repay a 7 million USD loan on the same asset. These transactions were not disclosed in quarterly reports or the bond prospectus.
Kohen emphasized his long-term commitment, stating he has built the company over 22 years, investing significant effort and valuable assets into the BVI-based entity established in August 2025 to raise debt in Israel and refinance expensive loans, some personally guaranteed. Despite the apology, Kohen Propertis bonds rose nearly 16% but still trade at a high gross yield of 10.6%, reflecting cautious investor sentiment.
This case follows a similar recent incident involving Simed, another BVI company that raised 620 million shekels in December but recently faced allegations of withdrawing 100 million shekels improperly and failing to meet investor obligations.
