The Capital Market Authority announced that the Appeals Committee in Securities Disputes has issued two final decisions against two financial companies, an investor, and several members of the board of a listed company. The violations included breaching Article 31 of the Capital Market Law and the fifth article of the Securities Business Regulations. The committee convicted the two financial companies and the investor for engaging in securities activities without proper licensing. Additionally, certain board members and executives were found guilty of violating the Company Law by the Royal Decree No. (M/3) dated 28/01/1437 AH. As a result, fines totaling 8.9 million riyals were imposed on the 12 defendants, with three of them sentenced to imprisonment for periods ranging from 3 to 6 months.
According to the Appeals Committee, the first final decision convicted Ammar bin Salem bin Ahmed Bakribah, Elmar Capital Company, and Elmar Financial Company for engaging in securities activities without authorization. They managed an investment fund, collected client funds for investment in the fund, and profited from the amounts invested without obtaining a license from the Capital Market Authority. The committee imposed a financial penalty of one million riyals on each of the three defendants, totaling 3 million riyals, and sentenced Ammar bin Salem bin Ahmed Bakribah to 90 days in prison.
The second final decision convicted several executives of the Saudi Industrial Exports Company, including the Chairman of the Board, members of the Board, and officers responsible for financial matters. The company and its external auditors were found to have recorded misleading data in the financial statements for the years ending on 31/12/2019, 31/03/2020, and 30/06/2020, inflating the company’s revenues by recognizing a deal with another entity without meeting the required accounting standards. The audit committee also participated in recording misleading data in the financial statements for the period ending on 30/06/2020. The executives were accused of concealing the company’s financial position intentionally.
The delays in addressing the deal in financial statements, despite suspicions, were also highlighted. The external auditors and the accounting director of the company were involved in recording misleading data in the financial statements, and the external auditor included false statements in the report submitted to the company’s general assembly. The financial penalties and imprisonment sentences were part of the penalties imposed on those found guilty of these violations. The Appeals Committee’s decisions emphasize the need for compliance with financial regulations and transparency in reporting financial information to protect investors and maintain the integrity of the capital market.
