CmaBoardReleases
Title: Announcement regarding issuance of Disciplinary Board Resolution No. (10/2022 Disciplinary Board) (138/2021Authority) and the imposition of a fine against Kuwait Real Estate Holding Company for violating the Rules of Disclosure and Transparency and Corporate Governance.
Announcement regarding issuance of Disciplinary Board Resolution No. (10/2022 Disciplinary Board) (138/2021 Authority) and the imposition of a fine against Kuwait Real Estate Holding Company for violating the Rules of Disclosure and Transparency and Corporate Governance.
For the following reasons:
For violating the following:
1) Provision of Items (10) and (27) of Article (4-1-1)) of Module Ten (Disclosure and Transparency) of Module Ten of the Executive Bylaws of Law No. 7 of 2010 and their amendments, for proving the following:
A. The Company’s failure to disclose its facilities settlement agreements relating to itself and its subsidiary company.
B. The Company's failure to disclose the results of the Board of Directors meeting held on 18/03/2019, during which an agreement to establish a portfolio was approved for the value of KWD 5,000,000 for a company and mortgaged 3 real estates for the Company and all of its shares in a company in return it will obtain financing in the amount of KWD 5,000,000.
2) Provision of Item (10) of Article (4-1-1) of Module Ten (Disclosure and Transparency) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, and Article (4-2-1) of the aforementioned Module:
The delay in disclosing a number of material information.
3) Provision of Article (6-6) Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:
The Company conducted and implemented many financial transfer operations without any written instructions issued by the authorized party in accordance with the matrix approved by the Company’s Board of Directors, in violation of the company’s internal control and regulatory systems, as indicated by the following:
A) Conducting and executing financial transfers from the Company to its employees (employee bonuses) according to verbal instructions.
B) Conducting and executing financial transfers to and from its subsidiaries according to verbal instructions.
C) Conducting and executing financial transfers from the company to its Managing Director and Chief Executive Officer according to verbal instructions.
D) Conducting and executing a financial transfer in the amount of KWD 1,000,000, on 29/05/2019 from the company to pay part of the settlement of credit facilities according to verbal instructions.
The Resolution included the infliction of the following penalty: -
“Kuwait Real Estate Holding Company is fined an amount of twenty thousand Dinars for the first and second violations, and thirty thousand Dinars for the third 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 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.