Title: Announcement regarding issuance of Disciplinary Board Resolution No. (87/2024 Disciplinary Board) (17/2024 Complaint) and imposition of a fine against: Arzan Finance Group Company for violating the Rules of Dealing in Securities. For the following reasons: Violation of Articles (5-1) and (5-12) of Chapter Five of Module Eleven (Dealing in Securities) of the Executive Bylaws of Law No. 7 of 2010 and their amendments. The Resolution included the infliction of the following penalty: - “Levying a fine on the defendant Arzan Finance Group Company in an amount of KWD 10,000 (ten 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.

Announcement regarding issuance of Disciplinary Board Resolution No. (19/2025 Disciplinary Board) (03/2025 Authority) and imposition of a fine against: 1- Kuwait & Middle East Financial Investment Company (KMEFIC), 2- Chairman of the Board of Directors, 3- Member of the Board of Directors (4 Members), 5- Chairman of the Audit Committee, 6- Member of the Audit Committee (2 members), 7- The Company’s Former Chief Executive Officer, 6- Senior Director – Financial Department, for violating the Rules of Conduct of Business and Corporate Governance.

For the following reasons:
1) Kuwait & Middle East Financial Investment Company (KMEFIC) violated the provision of Item (a/6) of (1/ Telephone Conversations) of (Second: Means of receiving clients’ orders, and mechanisms of keeping them) of Appendix 1 (Standards of Record Keeping Systems) of Module Eight (Conduct of Business) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:

It was proven to the CMA that a feature for deleting orders existed on the recording system of telephone conversations, which constitutes a violation by the Company to the provision of Item (a/6) of (1/ Telephone Conversations) of (Second: Means of receiving clients’ orders, and mechanisms of keeping them) of Appendix 1 (Standards of Record Keeping Systems) of the mentioned Module.

2) The Board of Directors of Kuwait & Middle East Financial Investment Company (KMEFIC):
1- Chairman of the Board of Directors.
2- Member of the Board of Directors.
3- Member of the Board of Directors.
4- Member of the Board of Directors.
5- Member of the Board of Directors (formerly).

They violated the provision of Item (4) of Article (3-7) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:

It was proven to the CMA that, in their capacities as members of the Board of Directors of Kuwait & Middle East Financial Investment Company (KMEFIC), they did not carry out the tasks and responsibilities assigned to them through following up the Company’s executive management to ensure its commitment to the internal policies and procedures, particularly the Finance Department’s policy.

It was also proven that they did not carry out the tasks and responsibilities assigned to them through following up the Company’s executive management to ensure its compliance with the Board of Directors Resolution by Circulation No. 13/2022, dated 02/08/2022 on the establishment of an investment portfolio managed by the Company.

The Internal Audit Committee of Kuwait & Middle East Financial Investment Company (KMEFIC), as follows:
1- Chairman of the Internal Audit Committee.
2- Member of the Internal Audit Committee.
3- Member of the Internal Audit Committee.

They violated the following:
1- The provision of Items (7) and (12) of Article (5-7) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:

It was proven to the CMA that according to their authorities and responsibilities as members in the Audit Committee, they did not verify the following:

1) The effectiveness of the Internal Audit Department’s operations and tasks through the technical supervision of its work, due to inadequacies in the effectiveness of the operations and reports of the Audit Department relevant to the management of the Company’s investment portfolio.

2) According to their authorities and responsibilities as members in the Audit Committee, they did not ensure the Company’s commitment to the policies and procedures, particularly the Financial Department’s policy.

3) According to their authorities and responsibilities as members in the Audit Committee, they did not ensure the Company’s implementation of the Board of Directors Resolution by Circulation No. 13/2022, dated 02/08/2022 on the establishment of an investment portfolio managed by the Company. It was also proven to the CMA that the Finance Department did not obtain the required approvals from the entities authorized by the Board of Directors (Executive Director or Investment Committee) to sell or purchase shares at Boursa Kuwait for the portfolio’s interest since its establishment in August 2022 until the date of the end of inspection.

3- The provision of Item (1) of Article (6-8) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:

It was proven to the CMA that the Internal Audit Department did not carry out the procedures of audit and supervision of efficiency and effectiveness of internal audit systems. It was noticed that the Audit Department did not ensure soundness of the operations conducted by the Finance Department when issuing sale or purchase orders of shares for the portfolio’s interest, as the Finance Department did not obtain the required approvals from the entities authorized by the Board of Directors (Executive Director or Investment Committee) to execute such orders in accordance with the policy of the Finance Department.

In addition, the Company did not comply with the Board of Directors Resolution by Circulation No. 13/2022, dated 02/08/2022 on the establishment of an investment portfolio managed by the Company, and it did not provide the inspection team of an evidence that the Finance Department has obtained any authorities or required approvals from the authorized entities to issue sale or purchase orders of shares for the portfolio’s interest.

- The former Chief Executive Officer of Kuwait & Middle East Financial Investment Company (KMEFIC) violated the provision of Item (1) of Article (3-11) of Moule Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:

It was proven to the CMA that he did not comply with the internal policies, regulations, and systems of the Company, particularly the Finance Department’s policy.

It was also proven that he did not implement the Board of Directors Resolution by Circulation No. 13/2022, dated 02/08/2022 on the establishment of an investment portfolio managed by the Company.

- Senior Director – Finance Department at Kuwait & Middle East Financial Investment Company (KMEFIC) violated the provision of Item (1) of Article (3-11) of Moule Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:

It was proven to the CMA that he did not comply with the internal policies, regulations, and systems of the Company, particularly the Finance Department’s policy.

The Resolution included the infliction of the following penalty: -
“First: Levying a fine on Kuwait & Middle East Financial Investment Company (KMEFIC) in an amount of KWD 5,000 (five thousand Dinars) for the attributed violation.

Second: Levying a fine on Chairman of the Board of Directors in an amount of KWD 5,000 (five thousand Dinars) for the attributed violation.

Third: Levying a fine on each of:
1- Member of the Board of Directors in his capacity as Chairman of the Audit Committee at the Company.
2- Member of the Board of Directors in her capacity as Member of the Audit Committee Company.
3- Member of the Board of Directors in his capacity as Member of the Audit Committee Company.

In the amount of KWD 8,000 (eight thousand Kuwaiti Dinars) on each one of them for the attributed violation due to correlation.

Fourth: Levying a fine on Member of the Board of Directors in his capacity as the former CEO in an amount of KWD 10,000 for the attributed violations due to correlation.

Fifth: Levying a fine on Senior Director – Finance Department at the Company in an amount of KWD 2,000 for the attribute 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.