Internal Audit Reveals CEO Mike Kohan Owes $3.8 Million to Kohan Properties
An internal investigation at Kohan Properties uncovered that CEO and controlling shareholder Mike Kohan misused company funds amounting to millions of dollars for his personal needs and private assets. The audit revealed that $2.5 million from bond issuance proceeds were diverted to repay loans on Kohan's private assets unrelated to the company. Including interest and exit fees, this debt totals approximately $3.9 million. Contrary to Kohan's earlier claims that he had fully repaid the company, the investigation found that as of June 30, 2026, his debt to Kohan Properties was about $7.8 million. After subsequent payments and adjustments in July, the outstanding balance remains around $3.8 million as of July 29.
The audit committee mandated a 15% annual interest rate on the debt due to the risk, lack of collateral, and misuse of funds. Kohan committed to repaying the remaining principal by August 31 and all interest and related fees by the end of the year. The report also highlighted corporate governance failures, noting that some withdrawals occurred even after an eighth authorized signatory was appointed, as control procedures were not fully implemented. In response, the company appointed a new CFO, restricted signing authority so Kohan cannot sign alone, and enhanced oversight mechanisms.
Kohan Properties issued bonds worth 412 million shekels in Israel this year. Earlier this month, the company disclosed that Kohan used at least $9.6 million (nearly 30 million shekels) to repay loans on assets not owned by the company. The BVI-registered company informed investors that Kohan claimed to have returned the funds, but the audit contradicted these assertions. This scandal follows a similar case involving Simad, another BVI company that borrowed 400 million shekels in bonds and used the proceeds for personal loans of its controlling shareholders.
