Title: Announcement regarding issuance of Disciplinary Board Resolution No. (90/2023 Disciplinary Board) - (130 and 132/2023 Authority) and imposition of a fine against Al Maidan Clinic for Oral Health Services Company (MIDAN), Chairman of the Board of Directors, Vice Chairman of the Board of Directors (formerly), and (2) Members of the Board of Directors for violating the rules of Disclosure and Transparency and Corporate Governance

Announcement regarding issuance of Disciplinary Board Resolution No. (90/2023 Disciplinary Board) - (130 and 132/2023 Authority) and imposition of a fine against Al-Maidan Clinic for Oral Health Services Company (MIDAN), Chairman of the Board of Directors, Vice Chairman of the Board of Directors (formerly), and (2) Members of the Board of Directors for violating the rules of Disclosure and Transparency and Corporate Governance

For the following reasons:
First: Al-Maidan Clinic for Oral Health Services Company violated the provision of Items (16) and (17) of Article (4-1-1) of Module Ten (Disclosure and Transparency) of the Executive Bylaws of Law No. 7 of 2010 and their amendments:

It was proven to the CMA that Al-Maidan Clinic for Oral Health Services Company failed to disclose at Boursa Kuwait Securities Exchange two material information as follows:

1- The Company did not disclose the transaction executed between a company (a subsidiary) and the Company (a related party) through subscription in the shares of the capital increase in a percentage of 25.22% during December 2021.
2- The Company did not disclose the registered loss of KWD 2,409,494 (two million, four hundred and nine thousand, four hundred and ninety-four Kuwaiti Dinars) of the decrease in the value of investment in the Company (a related party) previously mentioned during the financial year that ended on 31/03/2022 as a result of revaluating this investment.

Second: Members of Al-Maidan Clinic for Oral Health Services Company:
1. Chairman of the Board of Directors.
2. Vice Chairman of the Board of Directors (formerly).
3. Member of the Board of Directors.
4. Member of the Board of Directors.

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

It was proven to the CMA though reviewing the financial statements for the financial year that ended on 31/03/2022 and the financial period that ended on 31/03/2023 of Al-Maidan Clinic for Oral Health Services Company that Al-Maidan Clinic for Oral Health Services Company, through its subsidiary company, has invested in the Company (a related party) through subscription in the shares of the capital increase in the amount of KWD 5,000,000 (five million Dinars). It was proven that on 05/12/2021, the Company was evaluated by a company (internal evaluation) in the value of 199 Fils per share. On the same date, a  partners’ meeting was held, and it was unanimously agreed that the subscription to the offered shares (50 million shares at 100 Fils per share) would take place. However, Al-Maidan Clinic for Oral Health Services Company did not record the full subscription amount of approximately KWD 5 million in the financial statements, but acknowledged the investment in the Company at a value of KWD 2,606,595 (two million, six hundred and six thousand, five hundred ninety-five Kuwaiti Dinars) only in the statement of financial position, and recorded an impairment loss of KWD 2,409,494 (two million, four hundred and nine thousand, four hundred and ninety-four Kuwaiti Dinars) due to the difference between the investment value of approximately KWD 5 million (100 Fils per share of the subscription) and the subsequent evaluation prepared by the Company after the investment. The price of the Company’s share after investment was valued at 50 Fils per share as on 31/12/2021 and Fils 52 per share as on 31/02/2022, reflecting a decrease in investment value of approximately 50% within less than a month. 

The Resolution included the infliction of the following penalty: -

“First: Levying a fine against Al-Maidan Clinic for Oral Health Services Company in the amount of KWD 2,000 (two thousand Dinars) for each of the attributed violations.

Second: Levying a fine against Members of the Company’s Board of Directors which are:
1- Chairman of the Board of Directors of Al-Maidan Clinic for Oral Health Services Company.
2- Vice Chairman of the Board of Directors of Al-Maidan Clinic for Oral Health Services Company (formerly).
3- Member of the Board of Directors of Al-Maidan Clinic for Oral Health Services Company.
4- Member of the Board of Directors of Al-Maidan Clinic for Oral Health Services Company.

In the amount of KWD 50,000 (fifty thousand Dinars) on each one 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 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.