The General Secretariat of the Committees for Resolution of Securities Disputes (GS-CRSD) announces the issuance of the Appeal Committee for Resolution of Securities Disputes' (ACRSD) final decision No. (3568/L.S/2024) of 1446 H., dated 26/05/1446 H., corresponding to 28/11/2024, on the public penal case filed by the Public Prosecution (referred to it by the Capital Market Authority (CMA)) against a number of members of the Board of Directors, the Executive Management, Members of the Audit Committee, and the External Auditor for Saudi Industrial Export Co. These individuals are: Hatem bin Hamad bin Abdullah Alsuhaibani (Chairman of the Board), Abdullah bin Abdulaziz bin Abdullah Almish'al (Board Member), Hazem bin Fahad bin Misfir Aldosari (Chief Executive Officer and Board Member), Salman bin Muhammad bin Sulaiman Alsuhaibani (Chairman of the Audit Committee and Board Member), Ahmad bin Muhammad bin Ali Aloraini (Audit Committee Member and Board Member), Muhammad bin Azzam bin Muhammad Alshuwai'er (Audit Committee Member), Mahmoud Muhammad Mukhtar Metwally (Chief Financial Officer), Ahmad Hassan Albanna Ibrahim Ahmad (Audit Manager at the External Auditor and Company Accounts Manager later on). This decision was also issued against the Saudi Group for Accounting & Auditing - Aljasser & Aldakheel (External Auditor). The decision concluded with conviction of the above-mentioned individuals and entity for violating Article (211/a) of the Companies Law issued by the Royal Decree No. (M/3) dated 28/01/1437 H., for committing the following acts:
- The registration of misleading information by the Executive Management in the financial statements ending on 31/12/2019, and the preliminary financial statements ending on 31/03/2020, and the preliminary financial statements ending on 30/06/2020, which led to inflating the Company's revenues, by recognizing the revenue of a deal with an establishment amounting (SR. 12,356,508) without fulfilling the conditions for recognizing it in accordance with the accounting and auditing standards approved by the Saudi Organization for Certified Public Accountants (SOCPA).
- The participation of the Audit Committee in registering misleading information in the preliminary financial statements ending on 30/06/2020, through the recognition of the revenue of the above-mentioned deal without fulfilling the conditions for recognizing it in accordance with the accounting and auditing standards approved by the Saudi Organization for Certified Public Accountants (SOCPA).
- The negligence of the Chief Executive Officer and Board Member to include this material fact relating to this above-mentioned deal in the preliminary financial statements ending on 31/03/2020, and the preliminary financial statements ending on 30/06/2020, with the intention to conceal the Company's financial position.
- The negligence of the Board of Directors to include this material fact relating to this above-mentioned deal in the preliminary financial statements ending on 30/06/2020, with the intention to conceal the Company's financial position.
- The delay done by the Board of Directors and the Audit Committee in handling the transaction of this deal in the preliminary financial statements ending on 31/03/2020, and the preliminary financial statements ending on 30/06/2020, despite doubts surrounding the deal's procedures, as it was only handled in preliminary financial statements ending on 30/09/2020.
- The participation of the External Auditor, its Audit Manager, and Account Manager of the Company in registering misleading information in the financial statements ending on 31/12/2019, and the preliminary financial statements ending on 31/03/2020.
- The External Auditor listed misleading information in his report that was presented to the General Assembly of the Company which included a statement that the Company's financial statements, covering all material aspects, fairly present the Company's consolidated financial position and its cash flows in accordance with the approved international financial reporting standards.
The decision included the imposition of a number of sanctions upon them according to the following:
First: Hatem bin Hamad bin Abdullah Alsuhaibani:
Imposing a fine upon him amounting to (SR. 550,000) five hundred fifty thousand Saudi Riyals.
Second: Abdullah bin Abdulaziz bin Abdullah Almish'al:
Imposing a fine upon him amounting to (SR. 550,000) five hundred fifty thousand Saudi Riyals.
Third: Hazem bin Fahad bin Misfir Aldosari:
- Imprisonment of (6) six months.
- Imposing a fine upon him amounting to (SR. 1,100,000) one million one hundred thousand Saudi Riyals.
Forth: Salman bin Muhammad bin Sulaiman Alsuhaibani:
Imposing a fine upon him amounting to (SR. 550,000) five hundred fifty thousand Saudi Riyals.
Fifth: Ahmad bin Muhammad bin Ali Aloraini:
Imposing a fine upon him amounting to (SR. 550,000) five hundred fifty thousand Saudi Riyals.
Sixth: Muhammad bin Azzam bin Muhammad Alshuwai'er:
Imposing a fine upon him amounting to (SR. 550,000) five hundred fifty thousand Saudi Riyals.
Seventh: Mahmoud Muhammad Mukhtar Metwally:
Imposing a fine upon him amounting to (SR. 650,000) six hundred fifty thousand Saudi Riyals.
Eighth: Ahmad Hassan Albanna Ibrahim Ahmad:
- Imprisonment of (6) six months.
- Imposing a fine upon him amounting to (SR. 750,000) seven hundred fifty thousand Saudi Riyals.
Ninth: Saudi Group for Accounting & Auditing (Aljasser & Aldakheel):
Imposing a fine upon it amounting (SR. 650,000) six hundred fifty thousand Saudi Riyals.
Furthermore, any person affected by such violations in this case is entitled to file a compensation claim (as individual or class action) with the CRSD for the damage he/she suffered from due to these violations, provided that such claim is preceded by a complaint filed with the CMA on this regard, via the following link: (File Complaint)
However, the GS-CRSD will announce to the public on its website in case of registering any class action in order to enable the rest of investors affected by such violations to apply to the CRSD to join the class action.
