Confirmed Dealing Firmly with the Violators and Manipulators of the Corporate Law and Partners` Money
Since the Ministry of Commerce and Industry received a number of complaints from customers, some officials from twelve joint stock and limited liability companies were referred to the Bureau of Investigation and Public Prosecution, over the past months, because of violating the Corporate Law. Therefore, the total number of companies, in which the officials are referred to the aforementioned authority, reached 24.Twelve joint stock and eleven limited liability companies, and one joint venture liquidator.
The violations including non-compliance with the mandatory Rules & Regulations by the officials in such companies, like not revealing the amendments occurred in the company's contract, and that recorded in the Commercial Registration, also non-disclosure of the transactions, in which the official has a personal interest in, as well as the delay in issuing the annual budgets, besides lack of commitment to provide the shareholders or partners with the annual reports on the companies` activities, and not enabling the partners to have access to the company`s documents.
The violations also included not holding the annual meetings of the General Assemblies, and not inviting the partners to share and take the decision about the company`s status, either to be continued or to be liquidated, as a result of the losses exceeding half of its capital, which is considered a violation of the Articles (23.10, 66,69,84,89,164,171, 172, 174.175) of the Corporate Law. Thus all the necessary legal procedures will be taken against those responsible, in accordance with Article (229) of the said law.
The Ministry confirmed that it will deal firmly against any offenses or irregularities, stressing at the same time that it will follow up and verify the commitment of all corporate officials, managers and members of the Board of Directors, with the articles and terms contained in the corporate law, and drawing the officials attention to the importance of their quick response with the Ministry in any issue, so as to avoid any legal penalties.
It is worth mentioning that the Ministry had announced earlier about adopting a plan to control and detect the offending companies, and to take the necessary action in that regards to protect the investors' money, in accordance with the Royal Order No. (4690) dated 06/02/1435 H, including the transfer of the competences of the bodies and committees, concerned with investigation and prosecution of criminal offenses, to the Bureau of Investigation and Public Prosecution Authority. This is part of the Ministry's keenness and on-going endeavors to protect the shareholders and preserve the rights of the customers, based on its control and supervisory responsibility on companies in the kingdom.