Title: Announcement Regarding Issuance of Disciplinary Board Resolution No. (63/2021 Disciplinary Board) (55/2021 Authority) and imposition of a fine of ten thousand Dinars against 1) Ajwan Gulf Real Estate Company. 2) Abdullah Mohammed Saleh Al-Humaidi - Chairman of the Board of Directors of Ajwan Gulf Real Estate Company (formerly) .

Announcement Regarding Issuance of Disciplinary Board Resolution No. (63/2021 Disciplinary Board) (55/2021 Authority) and imposition of a fine of ten thousand Dinars against 1) Ajwan Gulf Real Estate Company. 2) Abdullah Mohammed Saleh Al-Humaidi - Chairman of the Board of Directors of Ajwan Gulf Real Estate Company (formerly) for violating the rules of Disclosure and Transparency and Corporate Governance.

For the following reasons:   
First: Ajwan Gulf Real Estate Company, due to its violation of the following:    
1) Provision of Article (1-13) of Module Twelve (Listing Rules) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, where it was conclusively proven to the Authority that the Company listed under the item “Financial assets at fair value through other comprehensive income” in its financial statements for the period ending on 30/09/2020 one of the investments estimated at a value of KWD 6,488,716, which is unquoted foreign securities (an investment in London Resorts Holding Company Ltd.), but the Company did not have documents in its books and records that clearly reflect detailed and accurate details of the mentioned investment, as follows:
- The Company did not provide the Authority with share certificates for the aforementioned investment, notarized and certified by the official authorities in the source country (the United Kingdom).
- The Company did not provide the Authority with share certificates for the aforementioned investment, notarized and certified by the official authorities in the State of Kuwait attesting to the validity of these certificates.
- The Company did not provide the Authority with any documents notarized and certified by the official authorities regarding the percentage of completion of the main project for the mentioned investment, which is to develop a recreational resort in the United Kingdom.
- All valuations available for the said project were based on financial information that is either historical or expected from one of the related parties, which was based on assumptions and estimates only.
- The Company did not provide the Authority with any financial data for London Resorts Holding Company Ltd for the financial year ending on December 31, 2018 and on December 31, 2019, until the end of the inspection.
2) Provision of Item (2) of Article (5-7) of the mentioned Module, where it was established to the Authority beyond any doubt that there was no recommendation from the Audit Committee to reappoint the external auditor assigned to study the Company’s financial statements for the period ending on December 31, 2020.
3) Provision of Item (4) of Article (6-3) of the mentioned Module, where it was categorically proven to the Authority that the Company has no qualified human cadres to manage risks.
4) Provision of Item (1) of Article (6-5) of the same Module referred to, where it was categorically proven to the Authority that there are no strategies and policies approved by the Company’s board of directors to manage risks.
5) Provision of Item (2) of Article (6-7) of the mentioned Module, where it was categorically proven to the Authority that the Company did not appoint a director for the Internal Audit Department to carry out its internal audit tasks.
6) Provision of Article (8-7) of the mentioned Module, where it was categorically proven to the Authority that the Company did not appoint any employee to carry out the tasks of its Investors Affairs Unit.
7) Provision of Article (10-3) of the mentioned Module, where it was categorically proven to the Authority that there is no policy approved by the Company by its board of directors regarding stakeholders.
8) Provision of Article (11-1) of the mentioned Module, where it was categorically proven to the Authority that no training courses were available for members of the board of directors and executive management for the years 2019 and 2020.
9) Provision of Article (11-4) of the mentioned Module, where it was conclusively proven to the Authority that there is no performance appraisal for the members of the board of directors and the executive management of the Company.
10) Provision of Item (2) of Article (4-3) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, where it was categorically proven to the Authority that there is no clear and approved policy with the Company by its board of directors regarding remuneration of members of the board of directors and executive management.

Second: It was proven that Mr. Abdullah Mohammed Saleh Al-Humaidi - Chairman of the Board of Directors of Ajwan Gulf Real Estate Company (formerly) - has violated the provision of Article (3-1) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments. The board of directors did not did not take any measures to enhance the company's competitiveness, achieve high growth rates, and work on everything that contributes to maximizing profits, for the following reasons:-
a- The Company's investment in four food companies.
1. The Company invested in food companies with an amount of KWD 3,130,000 in 2017.
2. The company made losses on its investment in companies amounting to 2,033,745 KWD
3. The mentioned Companies continue to realize financial losses since their purchase.

b- The Company's assets:
The Company's total assets decreased from an amount of KWD 12,914,828 according to the financial statements for the period ending on December 31, 2019 to an amount of KWD 10,754,169. according to the financial statements for the period ending on 30/09/2020.

C- The Company's equity:
The Company's total equity decreased from an amount of KWD 11,847,555 according to the financial statements for the period ending on December 31, 2019 to an amount of KWD 9,205,926 according to the financial statements for the period ending on 30/09/2020.

d- Administrative structure of the Company:
The Company in general lacks qualified executive, administrative and functional cadres to manage the Company in a way that enables it to improve its competitiveness in order to achieve and maximize profits, and to maintain balanced growth rates for its profits, for example, but not limited to (original financial manager of the Company - human resources officer - compliance officer - risk officer - internal audit manager).

The Resolution included the infliction of the following penalty: -
“First: Ajwan Gulf Real Estate Company is fined an amount of one thousand Dinars for the third and fourth violations and an amount of one thousand Dinars for each of the other violations.
Second: - Mr. Abdullah Mohammad Saleh Al-Hamidi in his capacity as - Chairman of the Board of Directors of Ajwan Gulf Real Estate Company (formerly) is fined an amount one thousand Dinars for the violation attributed to him”.

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.