CmaBoardReleases
Title: Announcement Regarding Issuance of Disciplinary Board Resolution No. (33/2021 Disciplinary Board) (26/2021 Authority) and imposition of a fine of four (4) thousand Dinars against Al Mudon International Real Estate Company
Announcement Regarding Issuance of Disciplinary Board Resolution No. (33/2021 Disciplinary Board) (26/2021 Authority) and imposition of a fine of four (4) thousand Dinars against Al Mudon International Real Estate Company for violating the provision of Article (1-13) of Module Twelve (Listing Rules) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, and the International Financial Reporting Standards (IFRS) No. (24), whereas this item was not included in Note No. (13) (Related Party Transactions) and IFRS No. (9).
For the following reasons:
The 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 by reviewing the financial statements of the Al Mudon International Real Estate Company for the financial year ending on December 31, 2019, and the interim financial statements for the period ending on June 30, 2020 that it invested an amount of KWD 6,541,936 (six million five hundred and forty-one thousand nine hundred and thirty-six Kuwaiti Dinars) listed under the item of (Assets at fair value through other comprehensive income) within the Company’s financial position, which constitutes a violation of the IFRS according to the following:-
1- Violation of the IFRS No. (24), as this item was not included in Note No. (13) (Related Party Transactions):
Through the investment of the Al Mudon International Real Estate Company in a company with an investment rate of 39% in the shares of a company, which in turn has an investment in the shares of a company (a related party), and the investment was included in the balances and transactions with related parties item (Note 14 of Al Mudon International Real Estate Company for the financial year ending on December 31, 2018), while it was not included in the note on balances and transactions with related parties for the financial year ending on December 31, 2019 (Note 13 of the financial statements of the Al Mudon International Real Estate Company for the financial year ending on December 31, 2019), and it was not included in the note on balances and transactions with related parties for the period ending on June 30, 2020 (Note 8 of the financial statements ending on June 30, 2020).
2- Violation of IFRS No. (9):
The Company did not list an investment and evaluate it at fair value during the financial year ending on December 31, 2019, and the financial period ending on June 30, 2020, as required by IFRS No. (9).
The Resolution included the infliction of the following penalty: -
“The Company is fined an amount of four 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.