Internal audit at Cohan Properties revealed: Controlling shareholder still owes the company $3.8 million

An internal audit conducted at Cohan Properties revealed that the controlling shareholder and CEO, Mike Cohan, used company funds for his own needs and for the needs of his private assets in the amount of millions of dollars. The audit also revealed that some of Cohan's previous statements were inaccurate.

Despite Cohan's insistence that he had put the issue of bond fund usage behind him by repaying the full debt to the company, it appears that the holding company is struggling to move past the affair. According to a report by the company on Wednesday, the internal audit found that $2.5 million of the bond proceeds were not used for their intended purpose at all, but were transferred to repay loans for Cohan's private assets that do not belong to the company. With interest and exit fees, the debt regarding this component stands at approximately $3.9 million.

The company discovered that, contrary to what Cohan had stated earlier, not all funds were returned, at least not yet. After a comprehensive review of all transactions since the bond issuance, it was found that as of June 30, 2026, Cohan's debt to the company reached approximately $7.8 million. After deposits he made later in July and various offsets, the debt decreased, but it still stands at approximately $3.8 million as of July 29.

The audit committee determined that Cohan will pay interest of 15% per annum on the debt, due to the risk, lack of collateral, and the nature of the fund usage. Cohan committed to repaying the remaining debt by August 31, and the interest and related payments by the end of the year.

In addition, the report also reveals corporate governance failures: some of the withdrawals were made even after an additional authorized signatory was appointed, because control procedures had not yet been fully implemented. Following the events, the company appointed a CFO, restricted signing authorities so that Cohan cannot sign alone, and expanded control mechanisms.

Cohan Properties borrowed 412 million shekels in Israel in a bond series issued this year. At the beginning of the month, the company reported that Cohan had used at least $9.6 million, almost 30 million shekels, to repay loans on assets that do not belong to the company. The BVI company informed investors that the controlling shareholder reported to the company that he had returned the funds, but the company's audit found that these claims were inaccurate. The Cohan affair appeared shortly after the Simed affair, another BVI company that borrowed 400 million shekels in bonds and used the loan to repay personal loans of the controlling shareholders.