Title: Announcement Regarding Issuance of Disciplinary Board Resolution No. (56/2024 Disciplinary Board) - (58/2024 Authority) and imposition of a fine against: Kuwait and Middle East Financial Investment Company (KMEFIC) for violating the rules of Capital Adequacy Regulations for Licensed Persons and the Rules of Real Estate Assets Valuation

Announcement Regarding Issuance of Disciplinary Board Resolution No. (56/2024 Disciplinary Board) - (58/2024 Authority) and imposition of a fine against: Kuwait and Middle East Financial Investment Company (KMEFIC) for violating the rules of Capital Adequacy Regulations for Licensed Persons and the rules of Real Estate Assets Valuation

For the following reasons:
1) Violation of the provision of Article (3-1) of Module Seventeen (Capital Adequacy Regulations for Licensed Persons) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:

This is due to the decline of the Company’s capital adequacy percentage below the legal limit, mainly due to the Company’s investments in financial institutions, which led to deductions from the eligible capital in the amount of KWD 10.4 million, as shown in the table below:

2. Violation of the provision of Item (d) of Article (2) of Appendix No. (1) “Real Estate Assets Valuation” of Module Eleven “Dealing in Securities) of the Executive Bylaws:

This is due to the financial statements for the year ending 31/12/2023 showed that the Company delayed evaluating its property according to the bank’s valuation, as the valuation was done after the specified legal period, on 3/3/2024.

The Resolution included the infliction of the following penalty: -

“First: Levying a fine against Kuwait and Middle East Financial Investment Company (KMEFIC) in an amount of KWD 5000 (five thousand Dinars) for the first violation, with the necessity of addressing the Eligible Regulatory Capital to reach 100% or more than the Risk Based Capital Requirement.
Second: Levying a fine against the aforementioned Company in an amount of KWD 1,000 (one thousand Dinars) for the second attributed violation”.

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.