Disciplinary Board imposes fines on 6 companies for various violations
The Capital Markets Authority’s Disciplinary Board has taken action against multiple companies and their boards of directors, imposing financial penalties for various regulatory violations. One of the firms penalized was the National Industries Company, which faced fines for failing to comply with disclosure and transparency rules.
The decision to impose penalties was also driven by the company’s failure to disclose the signing of significant credit facility agreements. Additionally, the company 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 decision included imposing a financial penalty of 1,000 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 5,000 dinars for its violation, while the Chairman, several board members, the CFO, and the external auditor each received a financial penalty of 2,000 dinars 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.
In a related development, the 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 1,000 dinars 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 5,000 dinars 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 12/28/2022. The request, made by the former CEO, was for cloud services valued at 2.7 million dinars 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 6/30/2024 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 3/6/2024 through its subsidiaries, leading to a 24% 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 6.2 million dinars 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 5,000 dinars was imposed on KMEFIC for the violation, and the company was instructed to address its qualified regulatory capital to ensure it reaches 100% 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 5,000 dinars 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 2,000 dinars 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 3,000 dinars for the violations attributed to them.
Source: Al Jarida
