Delisting of Sultan Center raises concerns over shareholder rights and market transparency
Regulators say, ‘the company did not exercise the due diligence expected of a prudent entity in resolving reservations highlighted in its financial statements’
In a significant development for Kuwait’s financial markets, the Capital Markets Authority (CMA) has officially announced the delisting of The Sultan Center Food Products Company from the Kuwait Stock Exchange, effective today (Sunday).
This follows repeated warnings by Al-Anba daily, which has consistently highlighted governance and financial concerns surrounding the company in recent months.
From a market stability point of view, according to Al-Anba daily, the delisting decision is being positioned by regulators as a measure to uphold investor protection and promote transparency within the capital markets. In its official statement, the CMA emphasized that the move is “part of our ongoing efforts to ensure the integrity of the market and to protect the investor community.”
The CMA noted that Sultan Center failed to comply with Resolution No. 127 of 2024, which sets specific financial reporting and corporate governance standards. The company, according to regulators, “did not exercise the due diligence expected of a prudent entity in resolving reservations highlighted in its financial statements.” Moreover, it did not implement corrective measures to ensure the fair and accurate representation of its financial position.
These issues raise red flags for market participants and reflect broader systemic risks when financial reporting lapses go unaddressed.
In a strongly worded report, the company’s auditor expressed “material doubt about the group’s ability to continue as a going concern.” The auditor further revealed that current liabilities exceeded current assets, indicating severe liquidity challenges.
Additionally, Sultan Center’s parent company, Agility, included in its consolidated statements investment properties valued at 281.42 million dinars, a substantial portion of which — 259.48 million dinars — comprises properties leased by the Ministry of Commerce ns Industry under expired lease agreements. Adding to the legal complexity, real estate contracts worth 223.25 million dinars are currently under legal dispute, further clouding the group’s financial outlook.
With delisting, retail and institutional investors face significant uncertainty regarding the value and recoverability of their investments in Sultan Center. The absence of a trading platform post-delisting limits liquidity options and exposes shareholders to potential long-term value erosion.
Market observers argue that this case highlights the urgent need for stronger enforcement mechanisms and early warning systems to safeguard investor interests in the future. It also underscores the critical role of corporate transparency and the timely resolution of audit reservations in maintaining trust in the financial ecosystem.
https://www.alanba.com.kw/1308450
