CmaBoardReleases
Title: Announcement regarding issuance of Disciplinary Board Resolution No. (82/2024 Disciplinary Board) (39/2024 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 (Formerly) 3- Members of the Board of Directors of Ekttitab Holding Company (Formerly No. 9) 4- Chairman, Vice Chairman, CEO (Formerly). 5- Vice Chairman of the Board of Directors (Formerly), for violating the Rules of Disclosure and Transparency, and Corporate Governance
Announcement regarding issuance of Disciplinary Board Resolution No. (82/2024 Disciplinary Board) (93/2024 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 (Formerly) 3- Members of the Board of Directors of Ekttitab Holding Company (Formerly No. 9) 4- Chairman, Vice Chairman, CEO (Formerly). 5- Vice Chairman of the Board of Directors (Formerly), for violating the Rules of Disclosure and Transparency, and Corporate Governance
For the following reasons:
First: Ekttitab Holding Company violated the following:
1) Violations of Disclosure and Transparency (Module Ten - Article 4-1-1 , Items 9,22,30) these violations are related to the Company’s failure to disclose material information in the proper time affected the transparency in its transactions, as follows:
a) Failure to disclose the dismissal of a board member: The Company did not disclose the dismissal of a board member, even though this is material information and impacts investor decisions.
b) Failure to disclose the signing of a financial settlement agreement by the subsidiary on 30/12/2021.
The value of this agreement is equivalent to 17% of the Company's total assets, according to the financial statements for the period ending 31/12/2020, making it of substantial impact and requiring immediate disclosure.
c) Failure to disclose the cancellation of the financial settlement agreement referred to above. The agreement was terminated on 17/03/2022, without the Company disclosing it, even though this information would have a significant impact on investment decisions.
d) Failure to disclose the disciplinary board decisions issued against the Company and its board members.
2. delay in disclosing material information (Article 4-2-1 of Module Ten), the Company delayed disclosing a number of material information which led to a breach in the fair disclosure requirements during the appropriate time.
• Employment of the compliance officer: Not disclosed within the specified timeframe.
• The Authority's response to resume trading in the share: delay in disclosing it for 6 business days from the Vice Chairman.
• Resignation of the CEO: Not disclosed 15 minutes before the start of the next trading session.
3. Corporate Governance Violations, Articles 9-1 and 9-3 of Module Fifteen, due to the Company's failure to take measures to protect the Company's investments and shareholders' rights. It was proven that a subsidiary of Ekttitab Holding Company paid special salaries to the Company (which is neither a subsidiary nor an affiliate) without any written directions, exposing the Company to future legal and financial risks, as shown in the table below:
Second: Chairman of the Board of Directors of Ekttitab Holding Company, for violating the following:
1) Provision of Article (3-8) and Item 6 of Article (2-5) of Module Fifteen (Corporate Governance).
This is due to his delay in providing the Board of Directors with the meeting agenda. It has been proven that Ekttitab Holding Company did not commit to sending the Board of Directors’ meeting agenda within the legally specified time, as it was provided to the members less than 3 working days before the meeting date, which constitutes a breach of governance requirements, according to the table below:
2. Violating the provision of Article 3-7, item 1-paragraph a, item 13 paragraphs a,b.
The following was proven to the CMA:
a) The Company did not review its comprehensive strategic plan, as the plan submitted to the inspection team only covered the period 2019-2020 with no further updates.
b) The lack of an effective plan to extinguish accumulated losses up to the date of the inspection, reflecting weak financial and administrative planning.
c) The Company made investments without the approval of the Board of Directors, including:
- Investing in a company, even though investment decisions require formal approval from the Board of Directors and the CEO.
- Entering into the establishment of a company without a documented approval from the Board of Directors.
- Lack of documentation of the Board of Directors' approval for increasing the subsidiary's capital by KWD 4,000,000.
d) The minutes of the Board of Directors' meetings were lacking any discussion or approval of its subsidiary's signing of the financial settlement agreement dated 30/12/ 2021.
Third: Board of Directors of Ekttitab Holding Company and they are:
- Vice Chairman of the Board of Directors.
- Member of the Board of Directors.
- Member of the Board of Directors.
- Member of the Board of Directors.
This is due to their violation of the provisions of Article 3-7, Item 1- paragraph a of Module Fifteen. The Board of Directors did not regularly review the Company's comprehensive strategic plan. It was proven that the plan submitted to the inspection team was for the period of 2019 to 2021, with no updates after that date. It was also found that there was no approved plan or study to extinguish the Company's accumulated losses until the inspection date. The Board of Directors also disregarded major investments without documenting official approval, including the failure to document the Board of Directors' approval to increase the subsidiary's capital by an amount of KWD 4,000,000.
Fourth: Chairman of the Board of Directors of Ekttitab Holding Company (formerly)
1- Violation of Article 3-8 and Item 6 of Article 2-5 of Module Fifteen (Corporate Governance) due to the aforementioned party's failure to submit the agenda for Board meetings within the legally specified timeframe. The agenda was provided to the members less than 3 working days prior to the meeting, which constitutes a breach of governance requirements, as shown in the table below:
2- Violation of Article (3-7, Item 13, Paragraphs a and b) of the Corporate Governance Rules, as major investments were disregarded without documented Board of Directors approval. The most notable of these violations are:
- Investing in a company without obtaining official approval from the Board of Directors, despite the financial authority requiring it.
- Entering into the establishment of a company without documented Board approval, which resulted in exceeding management's authority.
- Lack of documentation of the Board of Directors' approval of the signing of the financial settlement agreement dated 30/12/2021 between the subsidiary and a number of other companies.
Fifth: Vice Chairman of the Board of Directors and CEO of Ekttitab Holding Company (Formerly) for violating the following:
1. Making financial transfers to non-associated or affiliated entities without legal explanation, thus violating Article 3-10, item 5 of Module Fifteen - Corporate Governance, it was proven that big financial transfers exceeding KWD 5,000 were made to companies with which the subsidiary has no ownership or control relationship. This constitutes a clear breach of the governance and financial risk management rules, according to the following table:
2. Violating the Corporate Governance Rules (Module Fifteen, Article 3-7, Item 13 - Paragraphs a and b), whereby major investments were overlooked without documented Board of Directors approval. The most significant of these violations are:
• Entering into the establishment of a company without documented Board of Directors approval.
• The non-existence of any minutes proving the Board of Directors' discussion or approval of the signing of the financial settlement agreement dated 30/12/2021 between the subsidiary and several other companies.
Sixth: Each of:
- Vice Chairman of the Board of Directors of Ekttitab Holding Company (Formerly)
- Member of the Borad of Directors of Ekttitab Holding Company (Formerly)
- Member of the Borad of Directors of Ekttitab Holding Company (Formerly)
This is due to the proven violation of the provisions of paragraph (a) of item (13) of Article (3-7) of Module Fifteen (Corporate Governance), as it became clear to the CMA that Ekttitab Holding Company invested in a company during the year 2020, exceeding the approved financial authority, according to what was presented to the inspection team. Governance rules for this type of investment require official approval from the Board of Directors and the CEO, but the investigations did not reveal any documents proving that the Company obtained this approval.
Seventh:
- Member of the Borad of Directors of Ekttitab Holding Company (Formerly)
- Member of the Borad of Directors of Ekttitab Holding Company (Formerly)
This is due to the proven violation of the provisions of Paragraph (b) of Item (13) of Article (3-7) of Module Fifteen (Corporate Governance), as it became clear to the CMA that the minutes of the meetings of the Board of Directors of Ekttitab Holding Company were completely lacking of any discussion or official approval from the Board of Directors regarding the signing of its subsidiary company, on the financial settlement agreement dated 30/12/2021.
Eighth: Member of the Borad of Directors of Ekttitab Holding Company (Formerly)
This is due to the proven violation of paragraphs (a, b) of Item (13) of Article (3-7) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and its amendments. The CMA discovered the following:
• Ekttitab Holding Company invested in establishing a company during 2021, exceeding its approved financial authority, according to the information submitted to the Authority's inspection team. Under the regulations, this investment requires official approval from the Board of Directors and the CEO, but the Authority did not find any documents proving the company had obtained such approval.
• The minutes of the meetings of Ekttitab Holding Company's Board of Directors were completely lacking any discussion or official approval from the Board regarding its subsidiary's signing of the financial settlement agreement dated 30/12/2021.
Ninth: Member of the Borad of Directors of Ekttitab Holding Company (Formerly)
This is due to its violation of the provisions of paragraph (a) of Item (13) of Article (3-7) of Module Fifteen (Corporate Governance), as the Authority has established that Ekttitab Holding Company invested through its participation in the establishment of Al Baraka International Kuwait Holding Company during the year 2021, in a manner that exceeds the approved financial authorities, according to what was presented to the inspection team. According to the applicable rules, this type of investment requires obtaining official approval from the Board of Directors and the CEO, but the Authority did not find any evidence proving that this approval was issued by the Board of Directors.
The Resolution included the infliction of the following penalty: -
“First: Levying a fine on Ekttitab Holding Company in an amount of KWD 10,000 (ten thousand Dinars) for the first and second attributed violations due to correlation, and an amount of KWD 5,000 (five thousand Dinars) for the third attributed violation.
Second: Levying a fine of KWD 5,000 (five thousand Dinars) on each of the following for the attributed violations:
1. Chairman of the Board of Directors of Ekttitab Holding Company.
2. Chairman of the Board of Directors of Ekttitab Holding Company (Formerly)
3. Vice Chairman and CEO of the Board of Directors of Ekttitab Holding Company (Formerly).
4. Vice Chairman of the Board of Directors of Ekttitab Holding Company (Formerly).
5. Member of the Board of Directors of Ekttitab Holding Company (Formerly).
6. Member of the Board of Directors of Ekttitab Holding Company (Formerly).
7. Member of the Board of Directors of Ekttitab Holding Company (Formerly).
8. Member of the Board of Directors of Ekttitab Holding Company (Formerly).
9. Member of the Board of Directors of Ekttitab Holding Company (Formerly).
10. Member of the Board of Directors of Ekttitab Holding Company (Formerly).
Third: Levying a fine of KWD 3,000 (three thousand Dinars) on each of the following for the attributed violations:
- Vice Chairman of the Board of Directors of Ekttitab Holding Company.
- Member of the Board of Directors of Ekttitab Holding Company.
- Member of the Board of Directors of Ekttitab Holding Company.
- Member of the Board of Directors of Ekttitab Holding Company.”
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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