Capital Markets Authority imposes fines on companies for violations
The violations included failing to conduct ongoing verification of customers and actual beneficiaries, not verifying actual beneficiaries within primary customers when checking national lists, and a deficiency in the company’s verification system that failed to identify one of its customers.
Capital Markets Authority’s (CMA) Disciplinary Board has imposed financial penalties against multiple companies and their boards of directors, for regulatory violations.
Among the companies against which actions were initiated were the National Industries Company, for failing to comply with disclosure and transparency rules, And the company’s failure to disclose the signing of significant credit facility agreements.
Additionally, the company was found to have delayed the disclosure of critical information, including lawsuits and rulings, contract signings, the resignation of the Executive Vice President of Factories, changes to its organizational structure, and other key agreements. The CMA imposed a fine of KD1,000 dinars on the company for each of the two violations it committed.
The Disciplinary Board imposed financial penalties on Al Tameer Real Estate Investment Company, along with its Chairman, Board members, Vice Chairman, CEO, CFO, and external auditor. The penalties were issued for violations related to listing regulations, corporate governance, securities activities, and registered persons. The company was fined KD5,000 for its violation, while the Chairman, several board members, the CFO, and the external auditor each received a financial penalty of KD2,000 for their respective violations. Additionally, a financial penalty of 3,000 dinars was imposed on the Vice Chairman and CEO for the violation related to disclosure obligations.
The CMA Disciplinary Board imposed a financial penalty on Wafra International Investment Company for violating the provisions of Book Sixteen of the Executive Regulations of Law No. (7) of 2010 and its amendments. The company was fined KD1,000 for the violation in all its provisions.
Importantly, upon reviewing the company’s verification mechanisms for terrorist lists and a selected sample of customers, the Authority found that Wafra International Investment Company had not established adequate policies and procedures to fully comply with the required obligations.
The violations included failing to conduct ongoing verification of customers and actual beneficiaries, not verifying actual beneficiaries within primary customers when checking national lists, and a deficiency in the company’s verification system that failed to identify one of its customers. However, the Authority noted that these violations were procedural rather than substantive.
The Council also issued a decision to impose a financial penalty of KD5,000 on Automated Systems Company for violating disclosure and transparency rules. The penalty was due to the company’s failure to disclose essential information to the Kuwait Stock Exchange or the Authority regarding the signing of a request form on 28 December 2022. The request, made by the former CEO, was for cloud services valued at KD2.7 million from a foreign company.
The Disciplinary Board has imposed a financial penalty on Kuwait and Middle East Financial Investment Company (KMEFIC) for violating capital adequacy regulations for licensed entities. The Authority’s review of KMEFIC’s capital adequacy report for the period ending 30 June 2024 revealed that the company’s capital adequacy ratio fell below the legally required level. This decline was attributed to the company’s purchase of a property on 6 March 2024 through its subsidiaries, leading to a 24 percent decrease in the ratio by the end of June 2024. The decrease was primarily due to a significant increase in the company’s investments, which grew by KD6.2 million during that period.
The decision also included rejecting the plea of inadmissibility of the case, which was based on a previous ruling. A financial penalty of KD5,000 was imposed on KMEFIC for the violation, and the company was instructed to address its qualified regulatory capital to ensure it reaches 100 percent or more of the capital requirements calculated based on risks.
The Board also imposed a financial penalty on Sultan Center Food Products Company, along with its Chairman, Vice Chairman, Board members, CEO, and CFO, for violations of listing and corporate governance regulations. The decision included a financial penalty of KD5,000 imposed on Sultan Center Food Products Company for failing to fulfill its duties in ensuring the accuracy and integrity of the data and information that must be disclosed.
A financial penalty of KD2,000 was imposed on the Chairman, Vice Chairman, and each of the Board members of Sultan Center Food Products Company for their respective violations. Additionally, the company’s CEO and Executive Financial Chief were each fined KD3,000 for the violations attributed to them.
