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CMA LAW: Announcement Regarding Issuance of Disciplinary Board Resolution No. (56/2021 Disciplinary Board) (63/2021 Authority) and imposition of a fine of twelve thousand Dinars against 1) YIACO Medical Company. 2) Arshid Abdulhadi Al Houri - Chairman of the Board of Directors of YIACO Medical Company for violating Disclosure and Transparency and Corporate Governance
Date Publish
28 September 2021
Announcement Regarding Issuance of Disciplinary Board Resolution No. (56/2021 Disciplinary Board) (63/2021 Authority) and imposition of a fine of twelve thousand Dinars against 1) YIACO Medical Company. 2) Arshid Abdulhadi Al Houri - Chairman of the Board of Directors of YIACO Medical Company for violating Disclosure and Transparency and Corporate Governance
For the following reasons:
First: YIACO Medical Company (YIACO). It was proven that the Company violated the following:
1) Violating the provision of Item (5) of Article (3-2-1) of Module Ten (Disclosure and Transparency) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:
It was proven that the Company did not obtain the acknowledgment mentioned in item (5) above from all the insiders mentioned in the list of insiders prepared by the Company and which is provided to the Authority.
2) Violating the provisions of Items (14), (15), (26) and (27) of Article (4-1-1) of Module Ten (Disclosure and Transparency) of the Executive Bylaws of the aforementioned Law and their amendments:
It was proven that the Company did not disclose the material information shown in the table below:
|
Date |
Material Information |
# |
|
24/11/2020 |
Issuance of the judgment of the Court of Appeal regarding a lawsuit filed against the Ministry of Health for the release of letters of guarantee for a total amount of KWD 3,000,000. |
1 |
|
29/9/2020 |
Issuance of the judgment of the Court of First Instance regarding a lawsuit filed against AstraZeneca UK Ltd and a sub-lawsuit filed by AstraZeneca UK Ltd against the Company, to compensate AstraZeneca an amount of KD 3,335,817. |
2 |
|
Court of Appeal session 19/06/2019 |
A lawsuit filed against Bayer Middle East and Al-Ghanim Health Care General Trading Company to compensate the Company for a total amount of KWD 2,439,660. |
3 |
|
14/01/2021 (date of the lawsuit) |
A lawsuit filed by the Development Enterprises Company against the Company, Kuwait Clearing Company and the Capital Markets Authority to challenge the CMA’s implicit decision to reject the objection submitted to the Company’s Extraordinary General Assembly’s decision held on 21/01/2020 to reduce the Company’s capital and cancel the entry in the commercial registry. |
4 |
|
Date of the meeting 31/07/2019 |
Non-disclosure of the recommendation to the General Assembly by the Board of Directors to amend the Company’s contract by adding an activity to the Company’s objectives (importing medicines and medical equipment and their supplies) in the Board of Directors meeting No. (4/2019). |
5 |
3) Violating the provision of Item (2) of Article (6-7) of Module Fifteen (Corporate Governance) of the Executive Bylaws of the aforementioned Law and their amendments:
It was proven that the (Internal Audit Officer) was not appointed by the Board of Directors directly, in addition to the fact that the Internal Audit Committee did not nominate him as an Internal Audit Officer.
4) Violating the provision of Article (8-6) of Module Fifteen (Corporate Governance) of the Executive Bylaws of the aforementioned Law and their amendments:
It was proven that the Company did not establish a special record for the disclosures of the members of the Board of Directors and the Executive Management.
5) Violating the provision of Article (11-8) of Module Fifteen (Corporate Governance) of the Executive Bylaws of the aforementioned Law and their amendments:
It was proven that the Company did not prepare systems for internal integrated reports, in accordance with the characteristics mentioned in Article (11-9) of the same Module.
Second: Mr. Arshid Abdulhadi Al Houri, Chairman of the Board of Directors of YIACO Medical Company, violated the following:
1. Provision of Article (3-2) of Module Fifteen (Corporate Governance) of the Executive Bylaws of the aforementioned Law and their amendments:
2. Provision of Item (1) of Article (3-8) of Module Fifteen (Corporate Governance) of the Executive Bylaws of the aforementioned Law and their amendments:
It was proven that some members of the Board of Directors were not provided with the information and data necessary to take the decisions set forth below, in addition to their non-participation in decision-making:
|
# |
Board Meeting Date |
Subject Matter |
Remarks |
|
1 |
29/3/2020 |
Purchasing a land in Al-Ardiya Industrial Area with a value of KWD 5,500,000 (five million five hundred thousand Kuwaiti Dinars only). |
Two members of the Board of Directors, Mr. Abdul Razzaq Al-Roumi and Mr. Abdullah Al-Abduljader, expressed their objection in the meeting minutes to the Executive Management’s purchase of the land without referring to the Board of Directors, as the property was purchased on 14/01/2020 (according to the ownership document issued by the Real Estate Registration Department in the Ministry of Justice). |
|
2 |
11/11/2020 |
Settlement of the Company's indebtedness with Boubyan Bank, amounting to KWD 2,488,605 (two million four hundred and eighty-eight, six hundred and five Kuwaiti dinars only). |
A member of the Board of Directors, Mr. Abdul Razzaq Al-Roumi, expressed his objection in the meeting minutes to the Board of Directors raising the issue of authorizing the Chairman and Vice Chairman of the Board of Directors to sign all financing contracts and other transactions with banks to finalize the debt settlement procedures with Boubyan Bank, without explaining or providing information and data on the debt settlement process so that the members of the Board of Directors can study the settlement and express an opinion on it. |
The Resolution included the infliction of the following penalty: -
“First: - YIACO Medical Company (YIACO) is fined an amount of two thousand Dinars for each of the violations attributed to it.
Second: - Mr. Arshid Abdulhadi Al-Houri, Chairman of the Board of Directors of YIACO Medical Company, is fined an amount of two thousand Dinars for the assigned violations”.
In this regard, the CMA emphasizes the implementation of CMA Law and its Executive Bylaws on all persons dealing in securities activities, and urges them to comply with these rules in order to promote investors' confidence, create a sound investment environment, and implement the Law according to the principles of fairness, transparency, and integrity in line with the best international practice.
Disclaimer: The information provided on this page is for reference purposes only, visitors are encouraged to review and understand the information provided in the official scanned document attached in the link above (if available). The CMA endeavors to ensure that the information on this page is complete and accurate, but the CMA does not guarantee the quality, accuracy, or completeness of any content at any time. In the event the information on this page is different from the content in the official scanned document attached in the link (if available), the official scanned document attached shall take precedence.
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