CMA LAW: Announcement regarding issuance of Disciplinary Board Resolution No. (43/2025 Disciplinary Board) (78 /2025 Authority) and imposition of a fine against: Equipment Holding Company for violating the rules of Disclosure and Transparency and Corporate Governance

Announcement regarding issuance of Disciplinary Board Resolution No. (43/2025 Disciplinary Board) (78 /2025 Authority) and imposition of a fine against: Equipment Holding Company for violating the rules of Disclosure and Transparency and Corporate Governance

For the following reasons:

1- The provision of Item (14) 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 that the Company failed to disclose the lawsuit (appeal ruling) filed by a company against a company (a subsidiary) on 18/09/2023, noting that the amount estimated by the company for the aforementioned lawsuit amounts to approximately KWD 974,071,000 which represents (6%) of the Company’s total assets according to the financial statements for the period ending on 31/12/2022.

2- The provision of Article (4-7-1) of Module Ten (Disclosure and Transparency) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, it was proven that the Company does not publish its disclosures on its website until the end date of the field inspection period.

3- The provision of Item (1) of Article (5-8) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, it was proven that the ordinary general assembly appointed the Company’s external auditor for the financial periods ending on 31/12/2023, 31/12/2024, and 31/12/2025, without the Audit Committee’s recommendation in this regard.

4- The provision of Item (3) of Article (6-3) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, it was proven that the Company failed to appoint a Risk Management Officer or assign an external office to perform the required tasks during the period from 2021 until the date the Company received the inspection letter on 20/04/2025.

5- The provision of Item (2) of Article (6-7) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, it was proven that the Company failed to appoint an Internal Audit Manager or assign an external firm to perform the required tasks during the period from 2021 until the date the Company received the inspection letter on 20/04/2025.

6- The provision of Article (6-9) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, it was proven that Internal Audit Department did not have a performance evaluation from an independent firm of the Company until the end date of the field inspection.

7-The provision of Article (11-1) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, it was proven that the Company did not provide any continuous training and qualification programs for members of the Board of Directors and the Executive Management from 2021 until the completion of the field inspection.

The Resolution included the infliction of the following penalty: -
“Levying a fine against/ Equipment Holding Company in the amount of KWD 5,000 (five thousand Dinars) for each of 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.

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