Saudi market regulator confirms fines, jail terms in MMG case

JEDDAH: Fines and jail terms for executives connected to the Saudi building contractor Mohammed Al-Mojil Group (MMG) were today confirmed by the local market regulator.
The Capital Market Authority (CMA) said in a final ruling on the case that it is imposing various penalties over “illegal profits” and other irregularities during the builder’s initial public offering (IPO).
The final decision was reached Wednesday by the Committee for the Resolution of Securities Disputes (CRSD) following an initial decision made on June 18, 2016.
Penalties include a sanction of SR1.62 billion against Mohammed bin Hamad Al-Mojil, former chairman of MMG’s board, over “illegal profits”. A five-year prison term and ban from working in listed companies for 10 years was also upheld.
A statement published on the CMA’s official website names nine defendants involved in the case — including board members, senior executives and the company’s external auditor — for violating articles of the Capital Market Law and Market Conduct Regulations.
The authority said they conducted “practices that created a misleading and incorrect impression regarding the value of Mohammed Al-Mojil Group Company’s security during the IPO stage of the company’s shares.”
The public announcement of the list of defendants is to ensure the CMA’s devotion “to apply justice, efficiency, and transparency in securities transactions as well as (to) protect investors from illegal acts,” it said.
The statement added that a separate case against violations at MMG would be considered later.
“CMA clarifies to the public that the decision convicts the defendants of the violations committed during the IPO stage; CRSD has not considered the violations occurred after the IPO regarding manipulating the company’s financial statements, as such violations will come in a separate case files before the committee,” it said.
“CMA started to take the legal procedures for filing this case against the violators. In due time, CMA will announce to the public the latest developments on the case.”
The 11 rulings confirmed on Thursday are:
1. Mohammed Bin Hamad Bin Abdulkarim Al-Mojil: Fined SR300,000, a five-year jail term upheld, obliged to pay SR1.62 billion to the CMA’s account for “illegal profits achieved as a result of these violations”, and banned from from working in listed companies for 10 years.
2. Adel Bin Mohammed Bin Hamad Al-Mojil: Fined SR300,000, imprisoned for five years, banned from working in listed companies for ten years.
3. Fahad Bin Ali Bin Saad Al-Raqtan: Fined SR300,000, imprisoned for three years, banned from working in listed companies for seven years.
4. Jassim Bin Mohammed Bin Ali Al-Ansari: Fined SR300,000, banned from working in listed companies for five years.
5. Abdullah Bin Mohammed Bin Saad Al-Hariqi: Fined SR300,000, banned from working in listed companies for five years.
6. Zaki bin Mansour Bin Ahmed AbuAlsaud: Fined SR300,000, banned from working in listed companies for five years.
7. Ahmed Bin Nasser Bin Yaqoub Al-Suwaidan: Fined SR300,000, banned from working in listed companies for five years.
8. Deloitte authorization no. (96) issued by SOCPA: Fined SR300,000, prevented from providing any legal accounting for authorized persons or any securities’ issuer for a period of two years, in a ban starting in 2015.
9. Baker Bin Abdullah Abu Alkhair: Fined SR300,000, banned from providing any legal accounting for authorized persons, or any securities’ issuer for a period of two years, in a ban starting in 2015.
10. Maintaining the confinement and the travel ban on the first defendant, Mohammed Bin Hamad Bin Abdulkarim Al-Mojil, until the repayment of all amounts under this decision.
11. Maintaining the travel ban of the second defendant, Adel Bin Mohammed Bin Hamad Al-Mojil, until the repayment of all amounts under this decision.