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The Securities and Commodities Authority (SCA) initiated an investigation into a number of suspected violations by some public joint stock companies listed on the UAE financial markets, most notably failure to present financial statements in a true and fair manner and failure to comply with the governance and institutional discipline standards. 

Among the violations being investigated in response to requests and complaints by shareholders are those attributed to another listed company. They involve practices committed by a number of its board members that, according to the shareholders, inflicted damage to them and to the company.
Depending on what the investigations and inspections reveal, SCA will take the necessary legal proceedings in accordance with Federal Law No. (4) of 2000 concerning the Emirates Securities and Commodities Authority and Market, Federal Law No. (2) of 2015 concerning Commercial Companies, and the implementing decisions.
As to licensed companies, SCA has concluded an investigation with a brokerage company and is considering to suspend its operations and to impose a number of financial penalties for proved violations including failure to segregate client accounts from the accounts belonging to the company and failure to comply with the international accounting standards.
It is worth mentioning that SCA receives complaints and suggestions from investors and stakeholders via multiple channels, including its Contact Us page, the National Customer Relation Management Gateway, and the live chat feature offered on its website.

 

 

The Securities and Commodities Authority (SCA) is keeping an eye on tweets which include views not in line with its regulations or with the Commercial Companies Law as they tend to mislead investors and the general public. It has been observed that some posts are detrimental to the integrity and standing of some government bodies. Accordingly, SCA will investigate violations and will take the necessary legal actions against users of these accounts. 

 

As part of the supervisory role it plays to ensure sound transactions and to protect investors, the Securities and Commodities Authority (SCA) referred a listed public joint stock company to the public prosecution on suspicion of acquisitions involving errors that lead to inflated acquisition value. The referral was made following SCA’s investigation in the acquisitions and deals concluded by the company. 

The CMA Board imposed a penalty of SR 10,000 (Ten Thousand Saudi Riyals) on a number of companies, due to the contravention of the provisions set forth in Article (101) and (224) of the Companies Law, since these companies have not formed non-executive director audit committees by a resolution of the Ordinary General Assembly, during the specified period granted to the companies.

 

 

 


The General Secretariat of Committees for Resolution of Securities Disputes announces the issuance of the Appeal Committee for the Resolution of Securities Disputes' resolution dated 25/07/1440 H, corresponding to 01/04/2019 G.
For further announcement's details, kindly visit the official website of General Secretariat of the Committees for Resolutions of Securities Disputes, via the following link:
The General Secretariat of Committees for Resolution of Securities Disputes (GS-CRSD) announces the issuance of the Appeal Committee for Resolution of Securities Disputes, decision No. (1684/L.S/2019) of 1440 H. dated 25/07/1440 H., corresponding to 01/04/2019G, on the suit filed by the Public Prosecution against: Majed bin Humaid bin Bakheet Aluhaibi.
The ACRSD decision text concluded with the conviction of the abovementioned inpidual for violating Article (49) of the Capital Market Law and Article (2) of the Market Conduct Regulations, when trading in shares of the following companies:
(Saudia Dairy and Foodstuff Co., Jabal Omar Development Co., and Wataniya Insurance Co.) during the period from 09/12/2013G to 26/12/2013G.
Such acts and practices constituted manipulation and fraud, and created a misleading and incorrect impression regarding the security of the abovementioned companies.
The decision of the ACRSD concluded with the imposition of a number of sanctions upon the convicted inpidual, as per the following details:
1. Imposing a fine on him amounting (180,000) One Hundred Eighty Thousand Riyals for these violations.
2. Obliging him to pay (151,607.75) One Hundred Fifty One Thousand, Six Hundred Seven Saudi Riyals and Seventy Five Halalas to the Capital Market Authority's account, for the illegal gains resulted from these violations.
3. Prohibiting him from trading by buying shares of the companies listed on the Exchange for his own account or in favor of others, for a period of one year.
4. Prohibiting him from working in companies listed on the Exchange for a period of one year.
Any person affected by these acts may file a compensation suit to the Committee as per Article 57 of the Capital Market Law, provided that such suit is preceded by a complaint filed with the Authority.

 

 

Following the announcement of the Capital Market Authority published on its website on 28/06/1438 H. corresponding to 27/03/2017 G., which included the issuance of CMA Board resolution to impose a fine of (50,000) Fifty Thousand Saudi Riyals on Mouwasat Medical Services Co. due to its violation of paragraph (f) of Article (213) of the Companies Law. The company prevented a shareholder from exercising voting rights associated with his shares in Mouwasat Medical Services Co., at the Ordinary General Assembly Meeting on 27/03/1438 H. corresponding to 26/12/2016 G(to review the announcement click here). The Capital Market Authority would like to announces that the Appeal Committee for the Resolution of Securities Disputes has issued its final decision on 12/09/1440 H. corresponding to 17/5/2019 G., on the lawsuit filed by Mouwasat Medical Services Co. against the Capital Market Authority. The verdict concluded with upholding the decision issued by the Committee for the Resolution of Securities Disputes, to revoke the abovementioned CMA Board decision. 

 

Proceeding from the Capital Market Authority's (CMA) responsibilities to protect the market from unfair and unsound practices involving cheating, fraud and manipulation. In addition, to ensure fairness, efficiency and transparency in securities transactions, and based on Article (17) of the Capital Market Law, the CMA would like to inform the investors and participants in the capital market that a CMA Board resolution was issued to refer a suspicion of a violation to the Public Prosecution. (5) investors were suspected of violating Article (49) of the Capital Market Law and Article (2) of the Market Conduct Regulations while trading the shares of one of the listed companies on the Saudi Stock Exchange.


The Capital Market Authority insures its devotion to apply the Capital Market Law and its Implementing Regulations as well as protect the investors from illegal acts. Whoever is affected by these acts can file a suit for compensation to the committee as per Article 57 of the Capital Market Law. This must be proceeded by a complaint filed to the CMA.

 

In view of the failure of a number of companies to meet the requirements of financial disclosure and to provide the Commission with financial statements in the first quarter in 2017, therefore, the Commission decided to suspend trading at Iraqi stock exchange.

 

The Board of Directors of the Capital Market Authority has decided to prevent Global Trust Financial Services LLC and Celebrity National Financial Services SOAC from practicing the licensed activities for three months until adjusting their situations as from March 3, 2019 pursuant to Article 31(b) of the Capital Market Law. Where the prevention term lapse without the companies adjusting their situations their licenses will be revoked pursuant to Article 30 of the Capital Market Law.
The CMA insisted on the importance of complying with the provisions of the Unitholders’ Assembly stipulated in article (2-35) of Module Thirteen of the Executive Bylaws of Law No. (7) of 2010 and their amendments, when funds unitholders’ assembly under liquidation is held.
Furthermore, Funds Managers Subject to the Provisions of Module Thirteen are required to comply with the provision of article (2-37) of Chapter Two (Funds) of Module Thirteen (Collective Investment Schemes) of the Executive Bylaws of Law No. (7) of 2010 and their amendments and the compliance with all requirements stipulated in the Bylaws regarding liquidation. 

As part of the Capital Markets Authority’s (CMA) continuous endeavor to provide investor protection from any actions or behaviors that the securities may be exposed to, and may violate Law No. (7) of 2010 Regarding the Establishment of the Capital Markets Authority and Regulating Securities Activities, its Executive Bylaws and their amendments, and in confirmation of its compliance with the provisions of the aforementioned Law and its Executive Bylaws, Resolution No. (1-36) of 2021 was issued by CMA Board of Commissioners in its meeting No. (36) of 2021 held on 13/10/2021. The Resolution stipulates “prohibiting major owners from dealing in the shares of Kuwait Remal Real Estate Company owned by them directly or indirectly, until the investigation with the concerned parties is completed and the decisions regarding suspected violations or crimes are issued”.
In conclusion, the CMA confirms that it will continue its supervisory role in protecting public investors, which will also create a fair, competitive and transparent financial market, as well as reduce the systemic risks that are expected to occur in securities activities, in addition to working to ensure compliance with laws and regulations related to such activities.

 

The Dubai Financial Services Authority (DFSA) has today published Decision Notices taking action against Mr Arif Masood Naqvi (Mr Naqvi) and Mr Waqar Siddique (Mr Siddique) for serious failings in respect of the Abraaj Group.
The DFSA imposed a financial penalty of USD 135,566,183 (AED 497,866,807) on Mr Naqvi and USD 1,150,000 (AED 4,223,375) on Mr Siddique. Mr Naqvi and Mr Siddique are also prohibited and restricted from performing any function in or from the DIFC.
Mr Naqvi and Mr Siddique dispute the DFSA’s findings and have referred the Decision Notices to the Financial Markets Tribunal (FMT), where the parties will present their respective cases. The DFSA’s decisions are therefore provisional and reflect the DFSA’s belief as to what occurred and how it considers their conduct should be characterised.
The FMT will determine what, if any, is the appropriate action for the DFSA to take and remit the matter to the DFSA with such directions as the FMT considers appropriate to give effect to its determination. The DFSA’s decisions may be confirmed, varied or overturned as a result of the FMT’s review.
Mr Siddique and Mr Naqvi both applied to the FMT for orders to prevent the DFSA from publishing the Decision Notices and to have the FMT hearings held in private. In January 2022, the FMT determined that the DFSA could publish the Decision Notices and that the FMT hearings will be public. The FMT stayed the operation of the financial penalties until the conclusion of the FMT proceedings but the prohibition and restrictions on Mr Naqvi and Mr Siddique from performing any function in or from the DIFC remain in effect. Mr Naqvi had previously applied to the DIFC Courts in June 2021 for permission to commence judicial review of the DFSA’s decision to take action against him. That application also failed, so the DFSA proceeded to issue Mr Naqvi with the Decision Notice, which he then referred to the FMT.
Mr Naqvi
Mr Naqvi founded the Abraaj Group in 2002. Under his leadership, it grew to become the largest Private Equity firm in the region, with an estimated USD 14 billion assets under management. Mr Naqvi was the largest shareholder, the CEO and Executive Vice Chairman of the Abraaj Group. Mr Naqvi was the face and personality of the Abraaj Group, building his profile and reputation around the world on the purported success of the Group’s impact investing strategy. He was by far the single most influential person within the Abraaj Group and the ultimate decision maker on material or disputed matters.
The Decision Notice states that Mr Naqvi was knowingly involved in misleading investors over the misuse of their funds by Abraaj Investment Limited (AIML), a Cayman Islands-registered firm not authorised by the DFSA. In particular, the DFSA found that Mr Naqvi personally proposed, orchestrated, authorised, and executed actions that directly or indirectly misled and deceived the investors as he:
· Instructed the use of investor monies to fund the Abraaj Group’s working capital and other commitments;
· Ranked investors according to the likelihood they would complain or challenge and withheld sale proceeds and reports from those investors who were less likely to do so;
· Approved and personally drafted false and misleading statements to investors to cover up the misuse of their funds. Mr Naqvi also attempted to appeal to more senior members of staff at the investors’ organisations to quash their queries;
· Was central to the cover-up of a USD 400 million shortfall across two funds by temporarily borrowing monies for the purpose of producing bank balance confirmations and financial statements to mislead auditors and investors;
· Approved the change of a fund’s financial year end to avoid disclosing a USD 200m shortfall; and
· Personally arranged to borrow USD 350 million from an inpidual in an attempt to make the Abraaj Group appear solvent and appease the demands of investors.
Mr Naqvi instructed and encouraged other members of Abraaj senior management to mislead and deceive the investors and stakeholders of the Funds.
Mr Naqvi was also knowingly involved in AIML carrying out unauthorised Financial Service activities in or from the DIFC, through his role as the head of the AIML Global Investment Committee and his actions in managing the Abraaj Funds.
The significant fine imposed on Mr Naqvi reflects the seriousness of these offences and is based on Mr Naqvi’s earnings from the Abraaj Group.
Mr Siddique
The DFSA found that Mr Siddique was knowingly involved in breaches by AIML and Abraaj Capital Limited (ACLD), a DFSA-Authorised Firm.
Mr Siddique was a member of the Abraaj Group’s senior management team from September 2005 until June 2018. During that period, Mr Siddique held a number of roles at the Abraaj Group, including the role of the COO (from 1 February 2011 until February 2012) and the Head of Finance and Operations (from January 2017 until his resignation in 2018). Mr Siddique was also an Authorised Inpidual as ACLD’s Licensed Director. In those roles, Mr Siddique was knowingly involved in certain AIML and ACLD breaches.
Mr Siddique was knowingly involved in AIML misleading and deceiving investors over the use of their monies with the Abraaj Funds. In particular, Mr Siddique was aware that approximately USD 400 million was taken from two Abraaj Funds and used as working capital for the Abraaj Group or to fund other investment commitments. In order to conceal such shortfalls, Mr Siddique was involved in deceiving auditors and investors as to the actual cash balance in the Funds’ bank accounts, including being a signatory to loan agreements used to produce misleading bank balance confirmations and misleading financial statements.
Mr Siddique was knowingly involved in ACLD’s contraventions of not maintaining its Capital Requirements as he authorised the majority of temporary cash transfers at quarterly reporting period ends over a five-year period. Mr Siddique also signed two financial returns sent to the DFSA which falsely declared that ACLD was in compliance with its Capital Requirements. In doing so, Mr Siddique also failed to act with integrity in carrying out his Licensed Function at ACLD.
A copy of the DFSA's Decision Notices can be found in the Regulatory Actions section of the DFSA website.
 

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