CmaBoardReleases
Title: Announcement regarding issuance of Disciplinary Board Resolution No. (70/2022 Disciplinary Board) (09/2022 Authority) and imposition of a fine against: Al-Arabiya Real Estate Company for violating the Listing Rules
Announcement regarding issuance of Disciplinary Board Resolution No. (70/2022 Disciplinary Board) (09/2022 Authority) and imposition of a fine against: Al-Arabiya Real Estate Company for violating the Listing Rules.
For the following reasons:
Provision of Article (1-13) of Module Twelve (Listing Rules) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, as it was proven to the Authority by reviewing the financial statements for the financial year ending on 31/12/2020 and the financial year ending on 30/06/2021, the Company’s external auditor had a qualified opinion on the financial statements ending on 31/12/ 2020 and this also applied on the same items in the financial statements for the period ending on 30/06/2021. The Company did not apply the following accounting standards:
a) International Financial Reporting Standard "IFRS 9" Paragraph (5):
It was proven to the Authority that there is an amount of KWD 7,039,955 (seven million and thirty-nine thousand nine hundred and fifty-five Kuwaiti Dinars only) for the Company listed under the item “ Commercial debtors and other debit balances”, which represents the net book value resulting from a valid compensation claim for the group, without preparing a recent study to determine the expected credit losses for the value of the compensation claim, without taking into account the expected amount to be claimed and the schedule for this claim, according to recent assurances from the Municipal Council of the Emirate of Ajman.
B) International Financial Reporting Standard "IAS37" Paragraph (14):
It was proven to the Authority that during the fourth quarter of 2019, the court, "Sharjah Court" in the United Arab Emirates, issued the appeal ruling obligating the group to pay an amount of 115 million UAE Dirhams (one hundred and fifteen million U.A.E Dirhams only), which is approximately KWD 9.7 million (nine million seven hundred thousand Kuwaiti Dinars only) and the transfer of the title deed of the hotel with a legal interest at 5% annually from the date of filing the lawsuit, without calculating an allocation for those legal benefits, as the Company was required to take allocations on legal interests as a result of a final decision issued by the court against it.
The Resolution included the infliction of the following penalty: -
" Al-Arabiya Real Estate Company is fined an amount of five thousand Dinars for the two attributed violations”.
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.