Former finance minister Moshe Kahlon is set to admit that he violated reporting duties while serving as chairman of UnetCredit Financial Services, as part of a plea agreement filed with the Tel Aviv District Court. Under the agreement, he will acknowledge failing to properly disclose serious financial irregularities at the company and will face a suspended prison sentence, a fine of 180,000 shekels, and an 18 month ban on serving as an officer in a public company, pending court approval.

The broader indictment in the UnetCredit case alleges a pattern of concealment, circular financing, and misuse of company funds by controlling shareholders and senior officials. At the center of the case is a 2020 share allocation deal in which the public company allegedly used its own funds to finance the purchase of shares by its controlling shareholders and associates, creating the false appearance that outside money had been invested.

A separate part of the case concerns major irregularities at the company’s Nazareth branch, including missing checks worth millions of shekels and suspected fictitious transactions. Prosecutors allege that Kahlon was informed in early 2022 about significant shortfalls but did not disclose the information when approving financial statements. The scandal ultimately led to trading in the company’s shares being suspended, financial statements being withdrawn, credit downgrades, and Kahlon’s resignation in June 2022.