Title: Announcement regarding issuance of Disciplinary Board Resolution No. (31/2023) Disciplinary Board (167,173/2022) Authority, and imposition of a fine against: 1. Ekttitab Holding Company 2. Chairman of the Board of Directors, Vice Chairman of the Board of Directors, Members of the Board of Directors of Ekttitab Holding Company (Formerly), for violating the Rules of Disclosure and Transparency, and Corporate Governance

Announcement regarding issuance of Disciplinary Board Resolution No. (31/2023) Disciplinary Board (167,173/2022) Authority, and imposition of a fine against:

1. Ekttitab Holding Company.

2. Chairman of the Board of Directors, Vice Chairman of the Board of Directors, Members of the Board of Directors of Ekttitab Holding Company (Formerly).

for violating the Rules of Disclosure and Transparency, and Corporate Governance.

For the following reasons:

First: Ekttitab Holding Company violated the following:

1) Provision of Item (3) of Article (4-1-1) of Module Ten (Disclosure and Transparency) of the Executive Bylaws of Law No. 7 of 2010 and amendments, it was proven to the Authority by reviewing the Company’s financial statements for the financial year ending on 31/12/2021 the Company’s failure to disclose its investment in a company that represents a percentage of its assets as in 31/12/2021, as well as the Company’s failure to disclose its investment in a company that represents a percentage of its assets as in 31/12/2021.
 

Second: Chairman of the Board of Directors, Vice Chairman of the Board of Directors, Members of the Board of Directors of Ekttitab Holding Company (Formerly), For violating the following:

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

The following was proven to the CMA:

1. The Company’s Board of Directors renewed a financing and partnership contract with a company during the financial year ending on 31/12/2021, despite not receiving any amounts for the contract concluded in the financial year ending on 31/12/2020, as well as not stating the type of project which will be in partnership with in in the renewal contract, moreover there is no effective analysis prepared for this investment opportunity or comparing it to the returns of investment opportunities that could result in beneficial returns for shareholders that may be available to Ekttitab Holding Company.

2. The type of project that will be in a partnership with is not stated in the initial contract concluded with the company, and there is no effective analysis in the study prepared by the Risk Committee for this investment opportunity or comparing it to the returns of investment opportunities that may be available to Ekttitab Holding Company that could result in beneficial returns for shareholders.

3. The Board of Directors acquired an additional allocation on the value of the amount due from investment sale deals to a (related party), as the amount due has not been paid by (a related party) to date, which is considered a discharge of the Company’s assets for the benefit of related parties which in turn led to harm the rights of the Company's shareholders.

4. The Board of Directors discharging the Company’s assets for the benefit of related parties, where an investment was sold to a (related party), without any amounts being collected within six months from the date of concluding the deal in accordance with the contract concluded between the two parties, which in turn led to harm the Company's shareholders.

2) Provision of Item (5) of Article (6-3) of the aformentioned module.

It was proven to the Authority that the Company’s Board of Directors concluded a financing and partnership contract with a (related party) without a recommendation from the Risk Management Department to the Board of Directors regarding this agreement.

The Resolution included the infliction of the following penalty: -

“First: Levying a fine on Ekttitab Holding Company in an amount of KWD 5,000 (five thousand Dinars) for the attributed violation.

Second: Levying a fine on Chairman of the Board of Directors, Vice Chairman of the Board of Directors, Members of the Board of Directors of Ekttitab Holding Company (Formerly) in an amount of KWD 50,000 (fifty thousand Dinars) for each of them  for the attributed 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 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.