CmaBoardReleases
Title: Announcement Regarding Issuance of Disciplinary Board Resolution No. (62/2021 Disciplinary Board) (67/2021 Authority) and imposition of a fine of 40 thousand Dinars against Arzan Financial Group for Financing and Investment for violating the rules of Disclosure and Transparency.
Announcement Regarding Issuance of Disciplinary Board Resolution No. (62/2021 Disciplinary Board) (67/2021 Authority) and imposition of a fine of 40 thousand Dinars against Arzan Financial Group for Financing and Investment for violating the rules of Disclosure and Transparency.
For the following reasons:
1. Provision of Item (3) of Article (4-1-1) of Module Ten (Disclosure and Transparency) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:
The Company failed to disclose in Boursa Kuwait an agreement signed with Boursa Kuwait Securities Company to sell all of its shares of the ownership of Kuwait Clearing Company (an associate company) for a total of KWD 12,015,000 (twelve million and fifteen thousand Kuwaiti Dinars only) as stipulated in Clarification No. (6) of the financial statements for the period that ended on June 30, 2020, which is considered material information.
2. Provisions of items (1) and (2) of Article (4-6-3) of Module Ten (Disclosure and Transparency) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:
The Company failed to disclose the financial effect resulting from the process of exiting its investments in its associate company (Kuwait Clearing Company) in a sound and truthful manner, which resulted in a loss and a decline between the book value and the fair value of the investment in an amount of KWD 4,567,654 (four million, five hundred and sixty seven thousand, six hundred and fifty four Kuwaiti Dinars only) without mentioning that effect in the Company’s disclosure.
The Resolution included the infliction of the following penalty: -
“Arzan Financial Group for Financing and Investment (Arzan) is fined an amount of twenty thousand Dinars for each of the violations attributed to it”.
In this regard, the CMA emphasizes the implementation of CMA Law and its Executive Bylaws on all persons dealing in securities activities, and urges them to comply with these rules in order to promote investors' confidence, create a sound investment environment, and implement the Law according to the principles of fairness, transparency, and integrity in line with the best international practice.