Officials of joint stock firms under scanner

Managers and officials in seven joint-stock and limited liability companies have been referred to the Bureau of Investigation and Public Prosecution because of alleged administrative and financial abuses related to Corporate Law.
The Ministry of Commerce and Industry (MCI) said on Wednesday that the offenders had manipulated funds and hidden facts and figures about the real financial status of the companies. The discrepancy was discovered during a formal inspection.
An official from the MCI said that the administrative and financial misuse were related to Corporate Law, represented by the non-observance of those responsible for the application of mandatory rules.
“This is with regard to the issuance of annual budgets and also a lack of commitment to provide shareholders and partners with periodic reports of the companies’ operations,” he said.
“The budget which has not been presented to the General Assembly, is considered a violation of Sections 66,84,89,174,175 of the Corporate Law. Such violations will lead to legal procedures against those responsible, in accordance with Article 229 of the law.”
The MCI says that the offenses are related to the manipulation of the partners finances and that the partners were not aware of the real financial status of the companies.
The official said that the officers had also failed to respond to inquiries from the MCI.
The ministry urged managers and members of the board of directors of other companies to remain committed to the regulations of the MCI and to respond to any inquiries in order to avoid penalties applied according to the Corporate Law.
He said the action was being taken according to the plan set up by the ministry to monitor violating companies and to take necessary procedures to protect the investors’ funds, according to Royal Order No. 4690, dated 06/02/1435 AH, and referring the criminal offenses to the Bureau of Investigation and Public Prosecution.
“All that is within the ministry’s keenness and ongoing follow-up to protect shareholders’ rights, and to emphasize its supervisory and control role on companies in the Kingdom.”
The MCI reconfirmed the need for fair and rational practices, as well as the application of transparency and disclosure standards, in accordance with the basic principles of corporate governance in the Kingdom.
Such measures aim to sustain and develop economic entities, the spokesman said, explaining its pursuit to promote and protect the rights of all dealers with companies, as well as to ensure the proper and fair application of standards and provisions of transparency and disclosure of the financial status of the companies.
Source: Arab News