Former Israeli Finance Minister Moshe Kahlon announced on Thursday that he was stepping down from the board of Unet Credit Financial Services, citing the company’s financial missteps and the findings of auditor Ofer Alkalay.
Prior to Kahlon’s announcement, Unet Credit paused trading on the Tel Aviv Stock Exchange, vaguely stating that “the company may have exposure due to loans it has provided. Said exposure is significantly larger than previously reported, and the company does not have the ability to evaluate it at this time.”
In a statement to the TASE, Unet Credit said it was “examining that in regard to some of the stated exposure, personal guarantees were provided by the controlling shareholders in the company.”
Unet Credit has been marred by controversy over the past year, including losing some 75 percent of its market value. In addition, an internal audit performed earlier this year found that 7.7 million shekels ($2.23 million) were missing from the company's books.
“Unfortunately – as you all may know – today we became aware that there may have been significant financial exposure, caused by events that occurred before I joined the company,” the former minister wrote in a letter to the board of directors.
“In light of these developments, it is with a heavy heart that I have decided to inform the controlling shareholders that I am exiting my roles as chairman of the company’s board and as director, effective immediately. I wish you and the company all the success in the future,” Kahlon added.
Unet Credit, based in Tel Aviv, provides non-banking credit services. Kahlon, who served as Finance Minister between 2015 and 2020, joined the company last year.
Originally, the former minister was scheduled to earn an 8.3 million shekel ($2.4 million) yearly salary, but that salary was lowered due to the public outcry.