Imposition of a Fine on Al-Ahsa Development Co.
Sunday, May 08, 2016 at 3:08 PM
2016-05-08 (1437-08-01) 15:08:13
The Capital Market Authority announces the issuance of a CMA Board resolution to impose a fine of SR 140,000 (One hundred and Forty Thousand Saudi Riyals) on Al-Ahsa Development Co. due to its violation of paragraph (A) of Article (9) of the Corporate Governance Regulations. The Board of Director's Report attached to the annual financial statements for the fiscal years 2011,2012,2013,2014 did not include that it did not apply paragraph (A) of Article (18) of the Corporate Governance Regulations and the reasons for that as the company did not present its investment in the Mada-4 Real Estate Fund managed by Arbah Capital to its shareholders at the general committee to have the authorization for such transactions.
The company also violated paragraph (18) of Article (43) of the Listing Rules as the company failed to disclose, in its Board of Directors' Report for the fiscal year 2011, the purchase of shares in the Mada-4 Real Estate Fund managed by Arbah Capital although two Board members of the company are also board members at Arbah Capital and they are: Saleh bin Hasan Alafalek and Abdullah bin Ali Almajdouie.
It also violated paragraph (A) of Article (40) of the Listing Rules due to disclosing incorrect information in the Board of Directors Report for the fiscal year 2011 and form (8) attached with its 2011 financial statements as it stated that it does not have any board member that has direct or indirect interest in the businesses and contracts done for the company although two Board members of the company: Saleh bin Hasan Alafalek and Abdullah bin Ali Almajdouie are also board members at Arbah Capital that manages the Mada-4 Real Estate Fund which its shares were bought in 2011. The company also violated paragraphs (D) and (E ) of Article (42) of the Listing Rules. The company failed to disclose in its financial statements for the year ending on 31/12/2014, as per the accounting standards issued by the Saudi Organization for Certified Public Accountants, the dealing with a person with relationship as it appeared that Almajdouie Trading Inc. is owned by the father of the company's Board Member Abdullah bin Ali Almajdouie and owns (%9.09) of Arbah Capital before buying the shares of the Mada-4 Real Estate Fund managed by Arbah Capital and after disassociation.