CmaBoardReleases
Title: Announcement regarding issuance of Disciplinary Board Resolution No. (13/2022 Disciplinary Board) (110/2021 Authority) and the imposition of a fine against each of: First: Kuwait Remal Real Estate Company, Second: 1. Mr. Khalifa Abdullah Al-Nassar as the Chairman of the Board of Directors of Kuwait Remal Real Estate Company 2. Mr. Ihab Abdel Hakim Abdullah Mahmoud as Vice Chairman of the Board of Directors of Kuwait Remal Real Estate Company 3. Mr. Radley Ran Raven (Member of the Board of Directors of Kuwait Remal Real Estate Company) 4. Mr. Yasser Mahmoud (Member of the Board of Directors of Kuwait Remal Real Estate Company) 5. Mr. Abdul-Rahman Abdullah Al-Kandari (Member of the Board of Directors of Kuwait Remal Real Estate Company), Third: Mr. Ihab Abdel Hakim Abdullah Mahmoud, as CEO of Kuwait Remal Real Estate Company for violating the Listing Rules and Corporate Governance.
Announcement regarding issuance of Disciplinary Board Resolution No. (13/2022 Disciplinary Board) (110/2021 Authority) and the imposition of a fine against each of:
First: Kuwait Remal Real Estate Company
Second:
1. Mr. Khalifa Abdullah Al-Nassar as the Chairman of the Board of Directors of Kuwait Remal Real Estate Company.
2. Mr. Ihab Abdel Hakim Abdullah Mahmoud as Vice Chairman of the Board of Directors of Kuwait Remal Real Estate Company.
3. Mr. Radley Ran Raven (Member of the Board of Directors of Kuwait Remal Real Estate Company).
4. Mr. Yasser Mahmoud (Member of the Board of Directors of Kuwait Remal Real Estate Company).
5. Mr. Abdul-Rahman Abdullah Al-Kandari (Member of the Board of Directors of Kuwait Remal Real Estate Company).
Third: Mr. Ihab Abdel Hakim Abdullah Mahmoud, as CEO of Kuwait Remal Real Estate Company.
for violating the Listing Rules and Corporate Governance.
for the following reasons:
First: Kuwait Remal Real Estate Company, for violating the following:
- The provision of Article (1-13) of Module Twelve (Listing Rules) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:
For the Company’s failure to provide the Authority with a contract to sell a local investment property worth 4,850,000 Kuwaiti Dinars (four million eight hundred and fifty thousand Kuwaiti Dinars) to a company (related party) without collecting an amount of 850,000 Kuwaiti Dinars (eight hundred and fifty thousand Kuwaiti Dinars) and including the remaining amounts of 4,000,000 Kuwaiti Dinars (four million Kuwaiti Dinars) under the Item (Commercial receivables and other debt balances), and did not provide evidence that Kuwait Remal Real Estate Company received an amount of 850,000 Kuwaiti Dinars (eight hundred and fifty thousand Kuwaiti Dinars) or any money transfers or bank authorizations in this regard, as a result, the Company and its board members serve the interests of the related parties at the expense of the Company’s shareholders’ rights, which is evident through this act that the Company’s shareholders bear material losses.
2. The provision of Item (5) of Article (6-3) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:
Due to the Company’s agreeing to conclude a settlement contract in the joint venture with a company (related party) by exchanging the Company’s cash assets of 6,399,700 KWD (only six million three hundred and ninety-nine thousand and seven hundred Dinars) and replaced with assets of low value that do not reflect their fair cost of 28,460,968 shares in …….. Company, which is a settlement that resulted in the company losing an amount of KD 5,000,000 within a period of two weeks (from the date of disclosure until the date of the financial statements), despite Kuwait Remal Real Estate Company’s knowledge of ....... Company to face some obstacles that prevent it from being able to pay the amount of the indebtedness resulting from the sale of a local property and its resorting to another Company (related party) to pledge on its behalf to pay the due amount, which indicates the knowledge of the Board of Directors of Kuwait Remal Real Estate Company of the deteriorating financial situation of….... Company and the obstacles it faces, without taking into account this matter when preparing and reviewing the evaluation prepared by Kuwait Remal Real Estate Company, as a result the information and financial estimations contained in the evaluation document contradict reality, which indicates a lack of care of a prudent person in managing the company's investment, which resulted in damaging the rights and interests of the shareholders.
It was also found that the Company had sold a local investment property at a value of KWD 4,850,000 (four million eight hundred and fifty thousand Kuwaiti Dinars) to ...... Company (related party) without collecting an amount of 850,000 Kuwaiti Dinars (eight hundred and fifty thousand Kuwaiti Dinars) and including the remaining amounts of 4,000,000 Kuwaiti Dinars (four million Kuwaiti Dinars) under the Item (Commercial receivables and other debt balances), as a result, the Company and its board members serve the interests of the related parties at the expense of the Company’s shareholders’ rights, which is evident through this act that the Company’s shareholders bear material losses.
Second: Each of the following:
1. Mr. Khalifa Abdullah Al-Nassar as the Chairman of the Board of Directors of Kuwait Remal Real Estate Company.
2. Mr. Ihab Abdel Hakim Abdullah Mahmoud as Vice Chairman of the Board of Directors of Kuwait Remal Real Estate Company.
3. Mr. Radley Ran Raven (Member of the Board of Directors of Kuwait Remal Real Estate Company).
4. Mr. Yasser Mahmoud (Member of the Board of Directors of Kuwait Remal Real Estate Company).
5. Mr. Abdul-Rahman Abdullah Al-Kandari (Member of the Board of Directors of Kuwait Remal Real Estate Company).
For violating:-
1. The provision of Article (3-1) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:
This is following what the Authority found, through reviewing the financial statements of the Kuwait Remal Real Estate Company for the financial year ending on 31/12/2020, that they, in their capacity as Chairman and members of the Board of Directors of Kuwait Remal Real Estate Company, did not work for the interest of the shareholders, as they did not collect the amounts due from the concluded annual lease contract entered into between …….. Company and Kuwait Remal Real Estate Company and continuing the agreement with the Company despite not collecting the previous rent amounts, and the Company’s dealings in the process of selling an investment property during 2018 and collecting the resulting amount, in addition to the Company’s dealings in the joint venture with ........ Company (related party).
In addition to the observations on the contract concluded between Kuwait Remal Real Estate Company and ………… Company, as follows:
• Not permitting the Authority to verify the owners of ........ Company due to the expiration of its membership according to the website of the Chamber of Commerce and Industry, as it has not been confirmed whether there is a relationship between ..... Company and the Kuwait Remal Real Estate Company, according to the Company renewing the contract concluded between them annually, despite the failure of Kuwait Remal Real Estate Company to collect the rental amounts.
• The continuation of Kuwait Remal Real Estate Company's contract with....... Company and its renewal annually to date, despite its failure to pay the rent, which amounted to 10,165,316 KD (ten million, one hundred and sixty-five thousand three hundred and sixteen Kuwaiti Dinars) as on 31/12/2020.
• Kuwait Remal Real Estate Company reduced the rent value in the contract concluded with ……… Company without any decision issued by the Board of Directors in this regard.
2. The provisions of Item (1, 3) of Article (7-3) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:
Due to their capacity as the chairman and members of the Board of Directors of Kuwait Remal Real Estate Company, agreed to conclude a settlement contract in the joint venture with....... Company (related party) by exchanging the cash assets of the Company amounting to KWD 6,399,700 (only six million three hundred ninety-nine thousand seven hundred dinars) and replaced with low-value assets that do not reflect the true fair value of 28,460,968 shares of...... Company shares, which is the settlement that resulted in the Company loss of 5,000,000 dinars within a period of two weeks (from the date of disclosure until the date of the financial statement), despite Kuwait Remal Real Estate Company’s knowledge of ....... Company to face some obstacles that prevent it from being able to pay the amount of the indebtedness resulting from the sale of property and its resorting to another Company…… Company (related party) to pledge on its behalf to pay the due amount, which indicates the knowledge of the Board of Directors of Kuwait Remal Real Estate Company of the deteriorating financial situation of….... Company and the obstacles it faces, without taking into account this matter when preparing and reviewing the evaluation prepared by Kuwait Remal Real Estate Company, as a result the information and financial estimations contained in the evaluation document contradict reality, which indicates a lack of care of a prudent person in managing the company's investment, which resulted in damaging the rights and interests of the shareholders.
It was also found that the Company had sold a local investment property at a value of KWD 4,850,000 (four million eight hundred and fifty thousand Kuwaiti Dinars) to ...... Company (related party) without collecting an amount of 850,000 Kuwaiti Dinars (eight hundred and fifty thousand Kuwaiti Dinars) and including the remaining amounts of 4,000,000 Kuwaiti Dinars (four million Kuwaiti Dinars) under the Item (Commercial receivables and other debt balances) and did not provide the Authority with the sale contract of the aforementioned property and evidence that Kuwait Remal Real Estate Company received an amount of 850,000 Kuwaiti Dinars (eight hundred and fifty thousand Kuwaiti Dinars) or any money transfers or bank authorizations in this regard, as a result, the Company and its board members serve the interests of the related parties at the expense of the Company’s shareholders’ rights, which is evident through this act that the Company’s shareholders bear material losses.
Third: Mr. Ihab Abdel Hakim Abdullah Mahmoud, in his capacity as CEO of Kuwait Remal Real Estate Company:
This is because it was proven that he violated the provision of Item (4) of Article (3-10) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, for not collecting an amount of KWD 850,000 (eight hundred and fifty thousand Kuwaiti Dinars), in his capacity as CEO of Kuwait Remal Real Estate Company resulting from the sale of a local investment real estate with a value of 4,850,000 Kuwaiti Dinars (four million eight hundred and fifty thousand Kuwaiti Dinars) to …...... Company (related party) for occupying the position of CEO, and without providing the Authority with a sale contract of the aforementioned property and proof that Kuwait Remal Real Estate Company has received the amount of KD 850,000 (Eight hundred and fifty thousand Kuwaiti Dinars) or deposit or transfer it into the company’s bank account or bank confirmations in this regard to ensure the soundness of the procedures taken by the Company.
The Resolution included the infliction of the following penalty: -
“First: Kuwait Remal Real Estate Company is fined an amount of ten thousand Dinars for the first attributed violation.
Second: Fining each of the following:
(A)
1. Mr. Khalifa Abdullah Al-Nassar as the Chairman of the Board of Directors of Kuwait Remal Real Estate Company.
2. Mr. Ihab Abdel Hakim Abdullah Mahmoud as Vice Chairman of the Board of Directors of Kuwait Remal Real Estate Company.
3. Mr. Radley Ran Raven (Member of the Board of Directors of Kuwait Remal Real Estate Company).
4. Mr. Yasser Mahmoud (Member of the Board of Directors of Kuwait Remal Real Estate Company).
5. Mr. Abdul-Rahman Abdullah Al-Kandari (Member of the Board of Directors of Kuwait Remal Real Estate Company).
An amount of ten thousand dinars for what was assigned to them in the first violation
(B)
1. Mr. Khalifa Abdullah Al-Nassar as the Chairman of the Board of Directors of Kuwait Remal Real Estate Company.
2. Mr. Ihab Abdel Hakim Abdullah Mahmoud as Vice Chairman of the Board of Directors of Kuwait Remal Real Estate Company.
3. Mr. Radley Ran Raven (Member of the Board of Directors of Kuwait Remal Real Estate Company).
4. Mr. Yasser Mahmoud (Member of the Board of Directors of Kuwait Remal Real Estate Company).
5. Mr. Abdul-Rahman Abdullah Al-Kandari (Member of the Board of Directors of Kuwait Remal Real Estate Company).
6. Kuwait Remal Real Estate Company
An amount of ten thousand Dinars for the second violation attributed to them and the dismissal of the chairman and members of the board of directors whose names are mentioned in items 1 to 5 from the board of directors and their prohibiting them from practicing any of the activities registered with the Authority for a period of three years from the date of the issuance of the resolution.
Third: By fining Mr. Ihab Abdel Hakim Abdullah Mahmoud, in his capacity as CEO of Kuwait Remal Real Estate Company, an amount of ten thousand dinars, his dismissal from his position and prohibiting him from practicing any of the activities registered with the Authority for a period of three years starting from the date of the issuance of the resolution.
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.