Title: Announcement Regarding Issuance of Disciplinary Board Resolution No. (54/2021 Disciplinary Board) (47/2021 Authority) and imposition of a fine of fourteen thousand Dinars against 1) The Equipment Holding Company and 2) Musaid Abdulaziz Alusaimi- Chairman of the Board of Directors for violating Disclosure and Transparency and Corporate Governance

Announcement Regarding Issuance of Disciplinary Board Resolution No. (54/2021 Disciplinary Board) (47/2021 Authority) and imposition of a fine of fourteen thousand Dinars against 1) Equipment Holding Company 2) Musaid Abdulaziz Alusaimi- Chairman

for violating Disclosure and Transparency and Corporate Governance
For the following reasons:       

First:    Equipment Holding Company

Violating the 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:
due to the company’s failure to disclose changing its external auditor for the financial year ending on 31/12/2020, despite the general assembly’s approval.

Violating the provision of Item (14) of Article (4-1-1) of Module Ten (Disclosure and Transparency) of the Executive Bylaws of Law No. (7) of 2010 and their amendments:
For the company’s failure to disclose that its subsidiary company (Equipment Company W.L.L.) has filed lawsuits regarding the cancellation of two contracts concluded between it and the aforementioned subsidiary company, bearing in mind that the value of the first contract is KWD 9,800,000 (nine million eight hundred thousand Kuwaiti dinars), and the value of the second contract is KWD 8,310,250 (eight million three hundred and ten thousand two hundred and fifty Kuwaiti dinars).

Provision of Item (2) of Article (5-7) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:
The company’s audit committee did not recommend the appointment of the external auditor assigned to review the company’s financial statements for the financial period ending on 31/12/2020, according to the minutes of the audit committee’s meetings.

Provision of Item (1) of Article (5-8) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:

For the company’s ordinary general assembly, held on 19/07/2020, appointing the company’s external auditor for the financial period ending on 31/12/2020, without any recommendation from the Audit Committee in this regard.

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

For the company, on 01/08/2020, to assign the duties of the Risk Management Unit Officer, who occupies the position of the head of the legal department, which conflicts with the independence of the mentioned department.

Provision of Article (6-7) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. (7) of 2010 and their amendments:
For the company, on 01/08/2020, assiged the duties of the head of the internal audit unit, who at the same time occupies the duties of the financial manager (acting), which conflicts with the independence of mentioned unit.

Provision of Article (6-9) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:
The company has no Internal Control Report for the year 2019.

Second: Musaid Abdulaziz Alusaimi- Chairman of the Equipment Holding Company, for violating the following:

Provision of Item (1) of Article (2-5) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. (7) of 2010 and their amendments:
The company’s board of directors held only one meeting for the year 2020, not (6) meetings, in violation of what was stipulated in item (1) referred to above.

Provisions of Items (1) and (15) of Article (3-7) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. (7) of 2010 and their amendments:
The lack of an approved strategic plan by the company’s board of directors for the year 2019 and 2020, and the Authority also identified that the company has not had a CEO since August 22, 2019.

The Resolution included the infliction of the following penalty: -
“First: The Equipment Holding Company is fined an amount of two thousand Dinars for each of first, second, fifth, and sixth attributed violation. And an amount of two thousand Dinars for each of  third and fourth attributed violation.

Second: Musaid Abdulaziz Alusaimi- Chairman of Equipment Holding Company is fined an amount of two thousand Dinars for each of 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.