CmaBoardReleases
Title: Announcement regarding issuance of Disciplinary Board Resolution No. (83/2024 Disciplinary Board) (114/2024 Authority) and imposition of a fine against: 1- Chairman of the Board of Directors of Investors Group Holding Company (Formerly), 2- Chairman of the Board of Directors of Investors Group Holding Company (Formerly), 3- Vice Chairman of the Board of Directors of Investors Group Holding Company, 4- Member of the Board of Directors (Formerly - 3 Members).
Announcement regarding issuance of Disciplinary Board Resolution No. (83/2024 Disciplinary Board) (114/2024 Authority) and imposition of a fine against: 1- Chairman of the Board of Directors of Investors Group Holding Company (Formerly), 2- Chairman of the Board of Directors of Investors Group Holding Company (Formerly), 3- Vice Chairman of the Board of Directors of Investors Group Holding Company, 4- Member of the Board of Directors (Formerly - 3 Members).
For the following reasons:
The Investors Group Holding Company has established three subsidiary companies.
The following was proven after reviewing the documents:
• No resolutions were issued by the Company’s Board of Directors approving the establishment of those companies.
• No feasibility studies were found regarding the establishment of those companies.
• No bank accounts were available for two companies of the mentioned companies.
• No capital balances were found in any of the mentioned companies.
The Company did not provide the CMA with a clarification on how the debt emerged, according to which the settlement related to establishing a company was conducted:
The technical report issued by the concerned technical department at the CMA stated that through the onsite inspection conducted on Investors Group Holding Company during the period from 4/4/2021 to 22/4/2021, some serious remarks were monitored by the inspection team with regards to the mentioned Company’s non-compliance with some Articles of Law No. 7 of 2010 Regarding the Establishment of the Capital Markets Authority and Regulating Securities Activities and its Executive Bylaws and their amendments as follows:
1. The Company, intentionally, refrained from providing the inspection team with the required documents, such as statements of bank accounts at banks and the correspondences related to financial transfers with a company. In addition, it submitted those documents after the end of the inspection, which violates the provisions of Article (126/3) of the mentioned Law.
The Company submitted contradictory statements concerning the reason behind the payment of other entities’ subsidiaries of their employees’ salaries. Despite its claiming of liquidity shortage as a result of reservations on its bank accounts, it was revealed that it signed a contract with a non-banking company to transfer salaries for a commission, which misleads the CMA, obstructs its supervisory work, and violates the provision of Article (127/3) of the same Law.
Violations related to establishment of subsidiary companies:
• The Company established three subsidiary companies that form 87% of its total assets without the existence of establishment resolutions approved by the Board of Directors, and without preparation of feasibility studies for those companies.
• It has not opened bank accounts for two of the established companies, and the capitals of those companies were not deposited, which violates the regulatory requirements despite the expiration of the legal establishment period for some of them.
• The Company did not submit documents that prove the debt principal, according to which the settlements that led to establishing a company were signed, but it was satisfied with transfer of right contracts without attaching the original documents or providing a proof of the authenticity of debt origination.
Violation of the rules of Disclosure and Transparency:
• The Company refrained from disclosing the establishment of two subsidiaries that form a total of 87% of the total assets, which violates the provisions of Article (4-1-1) of Module Ten of the Executive Bylaws.
• The Company did not disclose a significant reduction in the value of one of its assets (land in Egypt) which exceeds 30% of the total assets.
• The Company delayed in disclosing material information related to the change of the Board of Directors and the date of submitting a formal complaint, which violates the provisions of Article (4-2-1) of the same Module.
2. Violation of the Governance requirements:
• It was proven that the Company’s Board of Directors was not informed of the establishment of the subsidiary companies, and no resolution was issued thereon, which violates the provision of Article (3-1) of Module Fifteen of the Executive Bylaws relating to the role of the Board of Directors in shaping the strategic directive and following up the executive performance.
• The Company submitted contradictory justifications for establishing those companies without having a clear vision or investment framework, which demonstrates a weak management and absence of effective control by the Board of directors.
The Resolution included the infliction of the following penalty: -
“Levying a fine on each of:
1. Chairman of the Board of Directors of Investors Group Holding Company (Formerly).
2. Vice Chairman of the Board of Directors of Investors Group Holding Company.
3. Member of the Board of Directors (Formerly).
4. Member of the Board of Directors.
5. Member of the Board of Directors (Formerly).
in the amount of KWD 20,000 (twenty thousand Dinars) on each one of them for the 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 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.

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