CmaBoardReleases
Title: Announcement Regarding Issuance of Disciplinary Board Resolution No. (43/2021 Disciplinary Board) (40/2021 Authority) and imposition of a fine of six thousand Dinars against each of Al Massaleh Real Estate Company and Mohammad Dawood Al-Saleh Chairman of the Board of Directors for violating Articles of Module Fifteen (Corporate Governance)
Announcement Regarding Issuance of Disciplinary Board Resolution No. (43/2021 Disciplinary Board) (40/2021 Authority) and imposition of a fine of six thousand Dinars against each of Al Massaleh Real Estate Company and Mohammad Dawood Al-Saleh Chairman of the Board of Directors for violating Articles of Module Fifteen (Corporate Governance)
For the following reasons:
First: - Al Massaleh Real Estate Company (Massaleh). It was proven that it violated the following:
1) Provision of Item (2) of Article (5-7) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 Regarding the Establishment of the Capital Markets Authority and Regulating Securities Activities and their amendments:
The Audit Committee failed to recommend the reappointment of the external auditor assigned to study the financial statements for the period ending on December 31, 2020, according to the minutes of the Audit Committee emanating from the Board of Directors.
2) Provision of Item (1) of Article (5-8) of Module Fifteen (Corporate Governance) of the Executive Bylaws of the aforementioned Law and their amendments:
The Ordinary General Assembly, held on 06/22/2020, reappointed the Company’s external auditor for the financial period ending on December 31, 2020, without any recommendation from the Audit Committee in this regard.
3) Provision of Item (4) of Article (6-3) of Module Fifteen (Corporate Governance) of the Executive Regulations of the aforementioned Law and their amendments:
The Company has not had a Risk Officer since 2015.
4) Provision of Item (2) of Article (6-7) of Module Fifteen (Corporate Governance) of the Executive Bylaws of the aforementioned Law and their amendments:
The Company has not had a Director for the Internal Audit Department since 2015.
5) Provision of Article (10-1) of Module Fifteen (Corporate Governance) of the Executive Bylaws of the aforementioned Law and their amendments:
The Company’s non-compliance with Article (183) of Law No. (1) of 2016 on the Promulgation of the Companies Law, which states that “……, The positions of chairman of the board of directors and chief executive officer shall not be combined.”
The Chairman of the Company’s Board of Directors also performed the duties of the Acting CEO, noting that the position of CEO of the Company has been vacant since December 2014.
6) Provision of Article (11-4) of Module Fifteen (Corporate Governance) of the Executive Bylaws of the aforementioned Law and their amendments:
The performance evaluation for the members of the Board of Directors and the executive management of the company was not available.
Second: - Mr. / Mohammad Dawood Musaed Al-Saleh, in his capacity as Chairman of the Board of Directors of Al Massaleh Real Estate Company, due to his violation of the following:
1- Provision of Item (1) of Article (2-5) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 Regarding the Establishment of the Capital Markets Authority and Regulating Securities Activities and their amendments:
The Company’s Board of Directors held only (4) meetings for the year 2020, and not (6) meetings, according to the item referred to above.
2- Provision of Item (1) of Article (3-7) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 Regarding the Establishment of the Capital Markets Authority and Regulating Securities Activities and their amendments:
There was no approved strategic plan available by the Company’s Board of Directors for the years 2019 and 2020.
3- Provision of Item (15) of Article (3-7) of Module Fifteen (Corporate Governance) of the Executive Bylaws of the aforementioned Law and their amendments:
The Company has not had an permanent CEO since the end of 2014.
The Resolution included the infliction of the following penalty: -
“First: - The violating Company is fined amount of one thousand Dinars for the attributed violations in the first and second items, and one thousand Dinars for the attributed violations in the third and fourth items, and one thousand Dinars for each violator in the fifth and sixth items.
Second: Mr. Mohammad Dawood Musaed Al-Saleh in his capacity as Chairman of the Board of Directors of the Al Massaleh Real Estate Company, is fined an amount of one thousand Dinars for the attributed violations in the first and second items, and one thousand Dinars for the attributed violations in the third item.”
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.