Title: Announcement regarding issuance of Disciplinary Board Resolution No. (19/2023 Disciplinary Board) (204/2022 Authority) and imposition of a fine against each of: 1- Massaleh Investments Company, 2- Bader Ghanim Al-Ghanim - Chairman of the Audit Committee at Massaleh Investments Company, 3- Fawaz Abdulaziz Al-Rowdan- Member of the Audit Committee at Massaleh Investments Company, 4- Meshal Abdullah Al-Musalam- Member of the Audit Committee at Massaleh Investments Company 5- George Salamah Abdulmaseeh - Manager of the Internal Audit at Massaleh Investments Company 6- Khaled Hassan Al-Ahmad (Al-Soor - Certified Public Accountants) in his capacity as the auditor of Massaleh Investments Company for violating the rules of Policies and Procedures of Licensed Persons, Clients’ Funds and Clients’ Assets and Corporate Governance

Announcement regarding issuance of Disciplinary Board Resolution No. (19/2023 Disciplinary Board) (204/2022 Authority) and imposition of a fine against each of:

1. Massaleh Investments Company.
2. Bader Ghanim Al-Ghanim- Chairman of the Audit Committee at Massaleh Investments Company.
3. Fawaz Abdulaziz Al-Rowdan- Member of the Audit Committee at Massaleh Investments Company.
4. Meshal Abdullah Al-Musalam- Member of the Audit Committee at Massaleh Investments Company.
5. George Salamah Abdulmaseeh -Manager of the Internal Audit at Massaleh Investments Company.
6. Khaled Hassan Al-Ahmad (Al-Soor - Certified Public Accountants) in his capacity as the auditor of Massaleh Investments Company.

for violating the rules of Policies and Procedures of Licensed Persons, Clients’ Funds and Clients’ Assets and Corporate Governance

For the following reasons:
First: Massaleh Investments Company violated the provision of Article (6-1) of Module Six (Policies & Procedures of Licensed Persons) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:
1) It was proven to the CMA that the Company failed to test the business continuity plan that it prepared and approved.

2) Violating the provision of Item (1) of Article (5-2-3) of Module Seven (Clients’ Funds and Clients’ Assets) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:

The Company failed to assign a location to manage clients’ investment portfolios in an adequate manner and did not equip it with effective monitoring tools, due to the place designated for managing investment portfolios in the headquarters of another company (Massaleh Real Estate Company - an associate company), as the place is next to other offices and departments of that company.

3) Violating the provisions of Items (2), (3), and (6) of (Second: Aspects related to Investment Portfolios managed by the Licensed Person) of Article (5-4-1) of Module Seven (Clients’ Funds and Clients’ Assets) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:

The Investment Portfolios’  management  policy prepared and approved by the Company did not include the following:

1. How  to  determine  variation  and  distribution  method  for  Investment  Portfolio consisting-assets according to the Client’s instructions.

2.  Method of determining investment targeted market subject to the Client’s instructions.

3. Bases and controls related to Securities distributions which shall be purchased and sold for the Clients’ account as for the Investment Portfolios managed by the Licensed Person.

Second: Each of:

1) Bader Ghanim Al-Ghanim- Chairman of the Audit Committee at Massaleh Investments Company.

2. Fawaz Abdulaziz Al-Rowdan- Member of the Audit Committee at Massaleh Investments Company.
3. Meshal Abdullah Al-Musalam- Member of the Audit Committee at Massaleh Investments Company.

It was proven that they violated the following:

1. The  provision of Item (7) of Article (5-6) of Module Fifteen (Corporate governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments. The Audit Committee did not meet with Mr. George Salamah Abdulmaseeh (the internal auditor registered with CMA) during the year ending on 31/12/2021.
2. The provision of Item (11) of Article (5-7) of Module Fifteen (Corporate governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments. The audit committee did not review the supervision reports and ensure that the necessary measures have been taken regrading not repeating the Company’s violation of the provisions of Items (2), (3), and (6) of (Second: Aspects related to Investment Portfolios managed by the Licensed Person) of Article (5-4-1) of Module Seven (Clients’ Funds and Clients’ Assets) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:

The Investment  Portfolios’  management  policy prepared and approved by the Company did not include the following:

1. How  to  determine  variation  and  distribution  method  for  Investment  Portfolio consisting-assets according to the Client’s instructions.

2.  Method of determining  investment  targeted  market  subject  to  the 

Client’s instructions.

3. Bases and controls related to Securities distributions which shall be purchased and sold for the Clients’ account as for the Investment Portfolios managed by the Licensed Person.

This is despite the fact that the same note was monitored on the Company during the field inspection from the period of 15/11/2020 to 26/11/2020, and the Company was warned on 21/2/2021 of the need to address it and not to be repeated in the future, the Company stated in the feedback processing form that it attached in its response dated 14/06/2021 to the aforementioned inspection results letter that it was corrected, which did not happen.

Third: Mr. George Salamah Abdulmaseeh - Manager of the Internal Audit at Massaleh Investments Company. It was proven that he violated the  provision of Item (7) of Article (5-6) of Module Fifteen (Corporate governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:

He did not perform the role he was assigned to regarding attending the periodic meetings with the Audit Committee during the year ending on 31/12/2021.

Fourth: Khaled Hassan Al-Ahmad (Al-Soor - Certified Public Accountants) in his capacity as the auditor of Massaleh Investments Company. It was proven that he violated the provision of Article (2-5 ) of Module Seven (Clients’ Funds and Clients’ Assets) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:

As it was proven to the Authority, by reviewing the report prepared by him and related to verifying the extent of the Company’s compliance with the provisions of Module Seven (Clients’ Funds and Clients’ Assets), which was prepared for the financial year ending on 31/12/2021, that the report did not include the observations that were monitored on the Company by the Authority, which are as follows:

1. The Company’s repeated violation of the provisions of Items (2), (3), and (6) of (Second: Aspects related to Investment Portfolios managed by the Licensed Person) of Article (5-4-1) of Module Seven (Clients’ Funds and Clients’ Assets) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, it was proven to the Authority that the Investment  Portfolios’  management  policy prepared and approved by the Company did not include the following:

1. How  to  determine  variation  and  distribution  method  for  Investment  Portfolio consisting-assets according to the Client’s instructions.

2.  Method of determining  investment  targeted  market  subject  to  the 

Client’s instructions.

3. Bases and controls related to Securities distributions which shall be purchased and sold for the Clients’ account as for the Investment Portfolios managed by the Licensed Person.

The Resolution included the infliction of the following penalty: -
First - Levying a fine against Massaleh Investments Company in an amount of KWD 3000 (three thousand Dinars) for the second violation, and an amount of KWD 2000 (two thousand Dinars) for the third violation. And levying a warning to stop committing the first attributed violation.

Second- Levying a fine against each of:
1) Bader Ghanim Al-Ghanim- Chairman of the Audit Committee at Massaleh Investments Company.

2)Fawaz Abdulaziz Al-Rowdan- Member of the Audit Committee at Massaleh Investments Company.

3. Meshal Abdullah Al-Musalam- Member of the Audit Committee at Massaleh Investments Company.

with an amount of KWD 1000 (one thousand Dinars) on each one of them for each of the two attributed violations.

Third- Levying a fine against George Salamah Abdulmaseeh -Manager of the Internal Audit at Massaleh Investments Company in an amount of KWD 1000 (one thousand Dinars) for the attributed violation,

Fourth- Levying a fine against Khaled Hassan Al-Ahmad (Al-Soor - Certified Public Accountants) in his capacity as the auditor of Massaleh Investments Company in an amount of KWD 1000 (one thousand Dinars) 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.