CmaBoardReleases
Title: Announcement Regarding Issuance of Disciplinary Board Resolution on Violation No. (21/2021 Disciplinary Board - 129/2020 Authority)
The Capital Markets Authority announces the issuance of Disciplinary Board Resolution passed in its meeting held on Tuesday May 11, 2021 on violation No. (21/2021 Disciplinary Board - 129/2020 Authority) filed against: 1. UniCap Investment and Finance Company. 2. Wadie Abdullah Al Sayegh –Chairman of the Board of Directors of Unicap Investment and Finance Company.
The operative part of the Resolution resulted in the aforementioned being convicted of violating the following:
First: Unicap Investment and Finance Company, for proving its violation of:
1. Provision of Article (1-2) of Module Eight (Conduct of Business) of the Executive Bylaws of Law No. 7 of 2010 and their amendments: which stipulated that:
“A Licensed Person must act honestly, fairly and professionally, in order to fulfil the interests of its clients.” It became evident that there was no employment contract signed between the Company and Mr. Mohammad Abdullah Al Sayegh (advisor to its Board of Directors), which indicates its lack of commitment to the principle of professionalism at work, which necessitates the need to sign a employment contract between the Company and any employee working for it, so that through it the rights and obligations of each of the parties to the aforementioned contract would be regulated.
2. Provision of Item (9) of Article (4-1-1) of Module Ten (Disclosure and Transparency) of the Executive Bylaws of Law No. 7 of 2010 and their amendments: which stipulated that: “A Listed Company shall disclose Material Information within the timing set out in Article (4-2) of this Module.” The Company failed to disclose the material information related to the resignation of Mr. Haider Siddiq, who holds the position of Investment Portfolio Manager (registered with the Authority as one of the senior executives) approved by its Board of Directors meeting No. (1 / 2020) held on January 5, 2020.
3. Provision of Item (2) of Article (4-2-1) of the same above-mentioned Module: Which stipulated that:
“A Listed Company shall immediately disclose Material Information according to the following:
2. If the information became available outside working hours of the Authority or the Exchange, disclosure shall be made fifteen minutes before the start of the next trading session after the availability of the Material Information.” The Company did not disclose the material information relevant to the court ruling issued in its favor stipulating to compensate it in an amount of KD 614,568 (six hundred and fourteen thousand five hundred and sixty-eight Kuwaiti dinars) during the permitted period of disclosure stipulated in the aforementioned Item.
And that is as follows:
Remarks |
Disclosure Time |
Disclosure Date |
Date of Receiving the Judgment |
No. |
The Company was required to disclose the court ruling on February 14, 2019 before the start of the trading session and not during it, as it actually happened. |
10:15 a.m. |
February 14, 2019 |
February 13, 2019 |
1 |
4. Provision of Item (5) of Article (4-3) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments: which stipulated that: “Roles and responsibilities of nomination and remunerations committee shall include:
………………………..
5. Preparing an annual governance report that includes the total remunerations given to Members of a Board of Directors, and the executive body and the managers; whether cash or benefits or privileges, of whatever nature and title, provided that this report shall be presented to the Company’s general assembly for approval and it shall be recited by the Board Chairman. The Company shall follow the standards of accuracy and transparency when preparing the remuneration report, so that all rewards awarded, whether direct or indirect, are disclosed, and any attempt to conceal or mislead shall be avoided”. The Company paid allowances for attending the meetings of the Board of Directors and the committees emanating from it in an amount of KD 7,300 (seven thousand and three hundred Kuwaiti Dinars) for the financial year ending on December 31, 2019 to one of its Board members on March 01, 2020 before obtaining the approval necessary in this regard from its general assembly, which was held on July 26, 2020.
Second: Mr. Wadie Abdullah Abdul Hamid Al Sayegh, in his capacity as Chairman of the Board of Directors of UniCap Investment and Finance Company, as it was proved that he violated the provisions of Article (7-5) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, which stipulated that:
“Any Members of a Board of Directors shall inform the Board of Directors of the personal interest related thereto in works or agreements concluded for the company and such reporting shall be listed in the minutes. The member of interest shall not be entitled to vote on the resolution issued in this regard.” He participated in approving the appointment of Mr. Mohammad Abdullah Al Sayegh as an advisor for the aforementioned Company during its Board of Directors meeting No. (9\1\12\2019) held on December 1, 2019, despite the fact that the appointed advisor is his brother, which is inconsistent with the provision of the aforementioned Article.
The decision included the infliction of the following penalty: -
“First: The violating Company is fined an amount of one thousand dinars for each of the violations attributed to it.
Second: The violator Mr. Wadie Abdullah Al Sayegh in his capacity is fined an amount of one thousand dinars for the 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.