Title: Announcement regarding issuance of Disciplinary Board Resolution No. (38/2022 Disciplinary Board) (219/2021 Authority) and imposition of a fine against each of: 1- Al Salam Group Holding Company. 2- Mohammad Doueiri Jyal Al-Enezi in his capacity as Chairman of the Board of Directors of Al Salam Group Holding Company for violating the Listing Rules and Corporate Governance

Announcement regarding the issuance of Disciplinary Board Resolution No. (38/2022 Disciplinary Board) (219/2021 Authority) and imposition of a fine against each of: 1- Al Salam Group Holding Company. 2- Mohammad Doueiri Jyal Al-Enezi in his capacity as Chairman of the Board of Directors of Al Salam Group Holding Company for violating the Listing Rules and Corporate Governance

For their violation of the following:

First: Al Salam Holding Group for violating the provision of Article (1 - 13) of Module Twelve (Listing Rules) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:

The following was proven to the CMA through the financial statements of Al Salam Group Holding Company for the year ending on 31/12/2020 and the nine months ending on 30/9/2021:

a) The Company’s failure to apply the International Financial Reporting Standard No. (IAS: 28) “Investments in Associates and Joint Ventures” paragraph (C41). It did not perform an impairment test for its investments in a company that is included in the item “investments in an associate” despite the presence of an indication, which is the decision issued by the Disciplinary Board dated 01/04/2021 against the Company.

b) The Company’s non-compliance with the application of International Financial Reporting Standard No. (IAS: 28) “Investments in Associates and Joint Ventures” paragraph (C41), as it did not reduce the book value of its investment in a company that is included in the item “investments in an associate” despite the presence of a clear indication of a decline by the actual value.

Second: Mr. Mohammed Doueiri Jyal Al-Enezi, in his capacity as Chairman of the Board of Directors of Al Salam Group Holding Company, for his violation of the following:

1) Provision of Article (3 - 1) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:

It was proven that the Company took provisions for credit losses from the item of (due from related parties) amounting to KWD 1,411,476 (one million four hundred and eleven thousand four hundred and seventy-six Kuwaiti Dinars only).

2) Provision of Article (7-1) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:

It was proven that the Company unloaded its assets by taking provisions against deals made with related parties. The Company recorded the total value of sales deals amounting to KWD 1,140,288 (one million one hundred and forty thousand two hundred and eighty-eight Kuwaiti Dinars) in the item of (due from related parties) on 01/07/2020, as these deals represented the sale of shares, without collecting the amounts resulting from these deals by the Company, especially since the Company took provisions from related parties.

The Resolution included the infliction of the following penalty: -

“First: - Al Salam Group Holding Company is fined twenty thousand Dinars for the attributed violation.

Second: Mr. Mohammad Douiri Jial Al-Enezi, in his capacity as Chairman of the Board of Directors of Al Salam Group Holding Company, is fined an amount of fifty thousand Dinars, removed from his position, and prevented from practicing any of the licensed activities and the Registered Employment Positions at the Capital Markets Authority for a period of three years from the date of the issuance of the Resolution.” 

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 Laws 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.