CmaBoardReleases
Title: Announcement regarding issuance of Disciplinary Board Resolution No. (21/2022 Disciplinary Board) (97-100/2021 Authority) and the imposition of a fine against each of: First: National Shooting Company (Shooting), Second: Mr. Mr. Sabah Salman Dawoud Al-Sabah in his capacity as the former Chairman of the Board of Directors of National Shooting Company (Shooting) For violating the Rules of Corporate Governance.
Announcement regarding issuance of Disciplinary Board Resolution No. (21/2022 Disciplinary Board) (97-100/2021 Authority) and the imposition of a fine against each of:
First: National Shooting Company (Shooting).
Second: Mr. Mr. Sabah Salman Dawoud Al-Sabah in his capacity as the former Chairman of the Board of Directors of National Shooting Company (Shooting)
For violating the Rules of Corporate Governance.
For the following reasons:
First: National Shooting Company (Shooting) violated provision of Article (11-4) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 and their amendments:
It was proven to the Authority through the Company’s acknowledgment that the Company did not establish systems and mechanisms to evaluate the performance of each member of the Board of Directors and executive management periodically.
Second: Mr. Sabah Salman Dawoud Al-Sabah in his capacity as the former Chairman of the Board of Directors of National Shooting Company (Shooting) violated the provision of Article (3-1) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 and their amendments:
It was proven to the Authority that on 11/09/2017, the Company signed a contract of financing and sharing profits with …. Company (an associate company to National Shooting Company (Shooting)) for the purpose of investing its financial surpluses with the mentioned company in an amount of 2,835,000 KWD, noting that the invested amount shall be returned with its profits after four months.
In addition, the mentioned contract was renewed several times, the last of which was on 11/07/2019 in an amount of 2,505,000 KWD, noting that the invested amount shall be returned with its profits after six months.
It was also proven that …. Company failed to pay the larger part of the invested amount of …. Company and that the failure was in the amount of 2,434,761 KWD.
Moreover, on 02/07/2020, the two companies signed a final settlement contract based on which …. Company paid 500,000 KWD to …. Company, noting that the remaining amount of the investment shall be paid through …. Company’s assignment of its ownership of three companies in favor of …. Company.
As a result of previewing and examining the settlement deal, the Board of Directors’ approval of the mentioned settlement deal has high financial risks in the form that does not contribute in maximizing the profits and is not in the interest of the shareholders for the following reasons:
The Company does not have any feasibility studies concerning the mentioned three companies in settlement.
Most of the assets of the previously mentioned three companies are in the shares of …. Company whose shares are suspended from trading.
The total amount of the assets of the mentioned three companies was 1,375,349 KWD, of which 1,314,235 KWD represent the shares of …. Company whose shares are suspended from trading.
The remaining amount of the in-kind payment that is 559,412 KWD was considered a temporary promotion, noting that no studies are available for such promotion.
The Resolution included the infliction of the following penalty: -
“First: National Shooting Company (Shooting) is fined an amount of two thousand Dinars for the attributed violations.
Third: Mr. Sabah Salman Dawoud Al-Sabah in his capacity as the former Chairman of the Board of Directors of National Shooting Company (Shooting) is fined an amount of twenty thousand Dinars for the attributed violation in his capacity, and he is prohibited from practicing any of the licensed activities and the registered activities with the Capital Markets Authority for three years from the date of issuing 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.