CMA LAW: Announcement regarding issuance of Disciplinary Board Resolution No. (18/2026 Disciplinary Board) (10/2026 Authority) and imposition of a fine against: 1- Kuwait & Gulf Link Transport Company (KGL), 2- Chairman of the Board of Directors, 3- Vice Chairman of the Board of Directors, 4- Members of the Board of Directors (3 members), 5- Chief Executive Officer, for violating the Rules of Listing and Corporate Governance.

Announcement regarding issuance of Disciplinary Board Resolution No. (18/2026 Disciplinary Board) (10/2026 Authority) and imposition of a fine against: 1- Kuwait & Gulf Link Transport Company (KGL), 2- Chairman of the Board of Directors, 3- Vice Chairman of the Board of Directors, 4- Members of the Board of Directors (3 members), 5- Chief Executive Officer, for violating the Rules of Listing and Corporate Governance.

For violating the following:
First: Kuwait & Gulf Link Transport Company (KGL) violated the provision of Article (1-14) of Module Twelve (Listing Rules) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:

It was proven to the CMA through reviewing the financial statements of Kuwait & Gulf Link Transport Company (KGL) for the financial year that ended on 31/12/2024 that the Company did not comply with the requirements of the following international standards:

First: a- The International Accounting Standard (IAS 1) “Presentation of Financial Statements”, particularly paragraphs (41-42), which stipulate that:

“…. The entity must disclose in the financial statements, the nature and reason for adjustment and impact thereof on the related items.”.

b- The International Accounting Standard (IAS 8) “Accounting Policies, Changes in Accounting Estimates and Errors” particularly paragraphs (41-49), which stipulate that:

"… When amounts are adjusted due to change in accounting policy or correction of a material error, the entity must disclose it in the clarifications and restate the comparative amounts, where applicable...."

This is due to the Company’s failure to disclose in its financial statements of the financial year that ended on 31/12/2024 that it amended the investment value in an associate company within the Item of “Investment in Associates”, amounting to KWD 3,492,249 (three million, four hundred and ninety-two thousand, two hundred and forty nine Dinars only), as in the mentioned financial year, which represents 2% of the total assets of Kuwait & Gulf Link Transport Company (KGL), noting that the same investment was included in the previous financial year that ended on 31/12/2023 in the amount of KWD 2,718,151, which proves its non-compliance with the mentioned International Accounting Standards.

Second: a- International Accounting Standard (IAS 28) “Investments in Associates and Joint Ventures”:

b- International Financial Reporting Standard (IAS 36) “Impairment of Assets”:

This is due to the Company’s failure to conduct an impairment test to the associate company despite the presence of clear indicators of impairment.

Second: each of the following:
1- Chairman of the Board of Directors of Kuwait & Gulf Link Transport Company.
2- Vice Chairman of the Board of Directors of Kuwait & Gulf Link Transport Company.
3- Member of the Board of Directors of Kuwait & Gulf Link Transport Company.
4- Member of the Board of Directors of Kuwait & Gulf Link Transport Company.
5- Member of the Board of Directors of Kuwait & Gulf Link Transport Company.

They violated the provision of Item (5) 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 they did not perform the role assigned to them through ensuring the Company’s compliance with the provision of Article (1-14) of Module Twelve (Listing Rules) of the Executive Bylaws of Law No. 7 of 2010 and their amendments. The CMA noted through reviewing the financial statements of Kuwait & Gulf Link Transport Company for the financial year that ended on 31/12/2024 that it failed to comply with requirements of the following international standards:

First: a- The International Accounting Standard (IAS 1) “Presentation of Financial Statements”, particularly paragraphs (41-42), which stipulate that:

“…. The entity must disclose in the financial statements, the nature and reason for adjustment and impact thereof on the related items.”.

b- The International Accounting Standard (IAS 8) “Accounting Policies, Changes in Accounting Estimates and Errors” particularly paragraphs (41-49), which stipulate that:

"… When amounts are adjusted due to change in accounting policy or correction of a material error, the entity must disclose it in the clarifications and restate the comparative amounts, where applicable...."

This is due to the Company’s failure to disclose in its financial statements of the financial year that ended on 31/12/2024 that it amended the investment value in an associate company within the Item of “Investment in Associates”, amounting to KWD 3,492,249 (three million, four hundred and ninety-two thousand, two hundred and forty nine Dinars only), as in the mentioned financial year, which represents 2% of the total assets of Kuwait & Gulf Link Transport Company (KGL), noting that the same investment was included in the previous financial year that ended on 31/12/2023 in the amount of KWD 2,718,151, which proves its non-compliance with the mentioned International Accounting Standards.

Second: a- International Accounting Standard (IAS 28) “Investments in Associates and Joint Ventures”:

b- International Financial Reporting Standard (IAS 36) “Impairment of Assets”:

This is due to the Company’s failure to conduct an impairment test to the associate company despite the presence of clear indicators of impairment.

Third: Chief Executive Officer of Kuwait & Gulf Link Transport Company violated the following:

1- The provision of Item (4) of Article (3-11) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:

2- The provision of Article (5-2) 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 he failed to perform the roles and responsibilities assigned to him as the Company’s Chief Executive Officer for Financial Affairs through ensuring that an integrated accounting system is set, which keeps books, records and accounts that reflect the Company’s financial statements and income accounts in detail and accurately, which enable maintaining the Company’s assets and preparing financial statements in accordance with international accounting standards approved by the CMA, and ensure the Company’s compliance with the provision of Article (1-14) of Module Twelve (Listing Rules) of the Executive Bylaws of Law No. 7 of 2010 and their amendments. It was also proven to the CMA through reviewing the financial statements of Kuwait & Gulf Link Transport Company for the financial year that ended on 31/12/2024 that the Company failed to implement the requirements of the following international standards:

First: a- The International Accounting Standard (IAS 1) “Presentation of Financial Statements”, particularly paragraphs (41-42), which stipulate that:

“…. The entity must disclose in the financial statements, the nature and reason for adjustment and the impact thereof on the related items.”.

b- The International Accounting Standard (IAS 8) “Accounting Policies, Changes in Accounting Estimates and Errors” particularly paragraphs (41-49), which stipulate that:

"… When amounts are adjusted due to change in accounting policy or correction of a material error, the entity must disclose it in the clarifications and restate the comparative amounts, where applicable...."

This is due to the Company’s failure to disclose in its financial statements of the financial year that ended on 31/12/2024 that it amended the investment value in an associate company within the Item of “Investment in Associates”, amounting to KWD 3,492,249 (three million, four hundred and ninety-two thousand, two hundred and forty nine Dinars only), as in the mentioned financial year, which represents 2% of the total assets of Kuwait & Gulf Link Transport Company (KGL), noting that the same investment was included in the previous financial year that ended on 31/12/2023 in the amount of KWD 2,718,151, which proves its non-compliance with the mentioned International Accounting Standards.

Second: a- International Accounting Standard (IAS 28) “Investments in Associates and Joint Ventures”:

b- International Financial Reporting Standard (IAS 36) “Impairment of Assets”:

This is due to the Company’s failure to conduct an impairment test to the associate company “United International Ports, Storage and Transport Company” despite the presence of clear indicators of impairment.

The Resolution included the infliction of the following penalty: -
“First: Levying a fine on Kuwait & Gulf Link Transport Company (KGL) in an amount of KWD 20,000 (twenty thousand Dinars) for the attributed violation in its two parts.

Second: Levying a fine on each of: Chairman and Vice Chairman of the Board of Directors in an amount of KWD 10,000 (ten thousand Dinars) on each one of them for the attributed violation.

Third: Levying a fine on each of the two Members of the Board of Directors in an amount of KWD 5,000 (five thousand Dinars) on each one of them for the attributed violation.

Fourth: Levying a fine on Member of the Board of Directors – and the Company’s Chief Executive Officer in an amount of KWD 20,000 (twenty thousand Dinars) for the attributed violations due to correlation”

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.

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