Saudi- CMA tightens grip on Almutakamela 

(MENAFN - Arab News) The board of Capital Market Authority (CMA) has issued its resolution to suspend the trading of shares of the Saudi Integrated Telecom Company (Almutakamela) in the Saudi Stock Exchange (Tadawul) from April 1 until the company amends its conditions. After the expiration of six months from the date of this decision, and if the company has not taken the necessary steps to correct its current position, the CMA will take the appropriate actions, according to a statement available on Tadawul website.

Based on the Capital Market Law issued by the Royal decree (M/30) and dated 2/6/1424H, the CMA explained, it is allowed to cancel any securities in the market or suspend its issuance or trading if necessary. This is in accordance with the Listing Rules issued by the board's decision number (3-11-2004) and dated Oct. 4, 2004, which states that the CMA can suspend or cancel the securities listing if it is considered that the issuer operations' level or its assets do not justify the continuous trading of its securities in the market.

Commenting on the CMA move, Jarmo T. Kotilaine, chief economist at the National Commercial Bank, said: "This is ultimately a standard regulatory action in pursuance of the provisions of the Capital Market Law. Similar steps have been taken before when companies have fallen short of regulatory requirements. The telecommunications space has in some ways proven particularly challenging in this regard, given the financial challenges associated with establishing national operations."

Kotilaine added: "From the market perspective, this is a necessary and desirable step. The effective protection of shareholder rights means ensuring that traded companies operate in compliance with the regulations that are desired to ensure their financial health and stability. Retail investors must have the confidence of knowing that such conditions are met."

Saudi Integrated Telecom Company announced its annual financial statements ending Dec. 31, 2011 (for the period between June 14, 2011 and Dec. 31, 2011) on Tadawul website on March 31, where auditor's report included some reservations where the company is asked to liquidate the two guarantees proposed to the Communication and Information Technology Commission in cash and kind, and what the company would own from the license and frequency band to provide fixed communication services in Saudi Arabia.

The company would pay the license fee and the financial outcome that would be written in the books as a company asset offset by the payment of the founding shareholders' share of SR650 million in the company's capital. The remaining balance of SR364,638,952 from the two guarantees should be written as funding from the founding shareholders.

In regard to CMA's announcement on its website and Tadawul on March 18 regarding the board resolution to oblige the listed companies that did not announce their annual financial statements for 2011 by the end of March 31, 2012 and in case any of the companies failed to announce its annual financial statements during this period, CMA will take the measures it sees fit to protect investors and the market according to the Capital Market Rules and its implementing regulations.

According to the announcement, two companies - Allied Cooperative Insurance Group and Buruj Cooperative Insurance Company - have not complied by failing to announce their annual financial statements during the specified period. According to the Capital Market Law and its implementing regulations, the board has issued its resolution to suspend trading of the shares of the two companies mentioned above starting from Sunday April 1 until they announce their annual financial statements in accordance to the statutory requirements.