CmaBoardReleases
Title: A Statement from the Capital Markets Authority Regarding Al-Madina for Finance and Investment Company
Kuwait, March 13, 2021 – Pursuant to the Capital Markets Authority’s (CMA) aims mentioned in Article (3) of Law No. (7) of 2010 Regarding the Establishment of the Capital Markets Authority and Regulating Securities Activities and its amendments, in particular its aims of enhancing investors protection and imposing the requirements of full disclosure in order to achieve fairness and transparency and to prevent conflicts of interests and the use of insider information as well as ensuring compliance with the rules and regulations related to securities activities, the CMA would like to draw the attention of all the dealers in Boursa Kuwait to the grave violations of the provisions of Law No. (7) of 2010 Regarding the Establishment of the Capital Markets Authority and Regulating Securities Activities and its Executive Bylaws and their amendments committed by Al-Madina for Finance and Investment Company.
CMA Board of Commissioners viewed the report of the specific purpose field inspection conducted on Al-Madina for Finance and Investment for the period from 15/11/2020 to 17/12/2020, and it decided the following:
First decision:
Al-Madina for Finance and Investment shall be referred to Kuwait Financial Intelligence Unit to consider the compliance of the mentioned Company with Law No. (106) of 2013 regarding Anti-Money Laundering and Combating Financing of Terrorism and its Executive Bylaws in order to investigate the funds transfers based on the notes of the field inspection team contained in the field inspection report mentioned above.
Second decision:
Al-Madina for Finance and Investment Company’s shares shall be suspended from trading in Boursa Kuwait until Kuwait Financial Intelligence Unit completes its work of money laundering suspicions referred to it by the CMA pursuant to its decision regarding the Company, and until the Disciplinary Board adjudicates the violations contained in the field inspection report mentioned above, based on clauses (1) and (3) of Article (1-18) of Module Twelve (Listing Rules) of the Executive Bylaws of Law No. (7) of 2010 Regarding the Establishment of the Capital Markets Authority and Regulating Securities Activities and their amendments which stipulate that: “The Authority may temporarily suspend trading in the Exchange, and suspend the trading of any Security listed in the Exchange in any of the following cases:
1. Violating the Issuer for any of the obligations imposed on it under the laws and regulations applied by the Authority and the Exchange.
2. ….
3. Achieve investor protection in the markets.”
This decision comes from the CMA’s keenness to protect investors from any action or behavior that may violate the mentioned Law and its Executive Bylaws and have an impact on the security.
Third decision:
In implementation of Article (67) of Law No. (7) of 2010 Regarding the Establishment of the Capital Markets Authority and Regulating Securities Activities and its amendments which stipulates: “The Authority may decline or suspend or revoke a license, or restrict the activity of a Person licensed to engage in the management of Securities activities, or any Person related to it, if it were given evidence that he has done one of the following:
1- Commits a major fault, gives misleading information, or omits to mention a material fact when applying for a license, or omits to mention any other information that should be submitted to the Authority.
2- Fails to meet the standards applied under this Chapter or any other subsequent system or bylaws issued accordingly.
3- Violates any provision, rule, regulation, or bylaws issued under this Law, or under any law related to its activity, or a Securities law, or rule or bylaws of another country.
4- Is negligent in monitoring one of his affiliates (subordinates) by failing to prevent him/her from acting in a way which might be a violation of the provisions of this Law or its Executive Bylaws.”
Therefore, the CMA Board of Commissioners decided to cancel the license of all securities activities granted to Al-Madina for Finance and Investment for the following reasons:
• Multiple observed notes on the mentioned Company.
• Negligence of the mentioned Company in preserving its clients’ legal and financial rights.
• Negligence of the mentioned Company in preserving its shareholders’ legal and financial rights.
• Repeated several notes by the mentioned Company, on which decisions were issue by the Disciplinary Board.
• Multiple warning resolutions issued by the CMA as well as the Disciplinary Board resolutions which were (22) resolutions.
Ends-
Notes to Editors:
The Capital Markets Authority was established pursuant to Law No. 7/2010, approved by the Kuwaiti Parliament in February 2010. Pursuant to the Law, the CMA shall regulate and supervise the securities activities, achieve transparency and fairness, observe listed companies’ execution of Corporate Governance regulations, and protect investors from unfair practices which violate the CMA's Law.
Furthermore, the Law's provisions stipulate the supervision of mergers, acquisitions, and disclosure operations. The CMA also aims to provide awareness programs related to securities activities.
For further information, please contact:
Public Relations & Media Office
Tel: 22903062
Fax: 22903505
Email: pr-media@cma.gov.kw