Title: Announcement regarding issuance of Disciplinary Board Resolution No. (47/2023) Disciplinary Board - (25/2023) Authority and imposition of a fine and a warning against each of: 1- Dimah Capital Investment Company, 2- Head and Members of the Audit Committee of Dimah Capital Investment Company, 3- Managing Director of Dimah Capital Investment Company, for violating the Rules of Clients’ Funds and Clients’ Assets, violating Rules of Collective Investment Schemes and violating Rules of Corporate Governance of the Executive Bylaws of Law No. 7 of 2010 and their Amendments

Announcement regarding issuance of Disciplinary Board Resolution No. (47/2023) Disciplinary Board - (25/2023) Authority and imposition of a fine and a warning against each of:

1- Dimah Capital Investment Company

2- Head and Members of the Audit Committee of Dimah Capital Investment Company

3- Managing Director of Dimah Capital Investment Company

for violating the Rules of Clients’ Funds and Clients’ Assets, violating Rules of Collective Investment Schemes and violating Rules of Corporate Governance of the Executive Bylaws of Law No. 7 of 2010 and their Amendments

For the following reasons: 

First: Dimah Capital Investment Company

1. Provision of Item (11) of Article (5-1-9) of Module Seven (Clients’ Funds and Clients’ Assets) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, as it has been proven to the Authority the Company’s failure to include the component of the portfolio contract with the client on the provisions related to delivering the funds and assets of the investment portfolio in case the Company’s license is terminated by the Authority.
2. Provisions of Article (5-10) of Module Thirteen (Collective Investment Schemes) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, where it was proven to the Authority that the Company concluded agreements where the transferring the ownership of collective investment scheme units occurred for the benefit of other clients of the Company without notify  the  Authority within fifteen business days of completing the transfer of ownership attached with a report that includes both parties of the transfer, number of Units and their value, and reasons of transferring the ownership.
3. Provisions 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, as it was proven to the Authority the failure of the Risk Department to follow-up on the Company transactions to be undertaken with  related parties and failure to provide recommendations in this regard.

Second: Head and Members of the  Audit Committee of Dimah Capital Investment Company.

It was proven to the Authority their violation of Item (7) of Article (5-7) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, the committee’s failure to ensure effectiveness in performing the internal audit services to implement the audit plan for 2020 and 2021.

Third: Chairman of Dimah Capital Investment Company

It was proven to the Authority their violation of Item (1) of Article (3-10) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, due to the following:

1) The executive management did not verify the implementation of the policies approved by the Board of Directors, as some investments were not reviewed by the Company’s Risk Department before executing them, in accordance with the provisions of the Risk Management Policies and Procedures Manual.

2) The executive management did not ensure that the Remuneration Committee held its meetings on a quarterly basis in accordance with the committee’s charter.

3) The executive management did not ensure that the Investment Committee holds its meetings on a monthly basis in accordance with the committee’s charter.

The Resolution included the infliction of the following penalty: -

"First: - Dimah Capital Investment Company as follows:

1. Levying A warning for the first attributed violation and considering its non- repetition in the future.
2. Levying a fine in an amount of KWD 5,000 (five thousand Kuwaiti Dinars) for the second attributed violation
3. Levying a fine in an amount of KWD 3,000 (three thousand Kuwaiti Dinars) for the third attributed violation.

Second: - Levying a fine on Managing Director of Dimah Capital Investment Company in an amount of 2000 (two thousand Dinars) for the attributed violation.

Third: - Levying a fine against the Head and Members of the Company’s Audit Committee of Dimah Capital Investment Company in an amount of KWD 2,000 (two thousand Kuwaiti Dinars) for each of them for the attributed violation.

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 Laws 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.