CMA LAW: Announcement regarding issuance of Disciplinary Board Resolution No. (48/2025 Disciplinary Board) (90/2025 Authority) and imposition of a fine against: National Investments Company, for Violating the Rules of Conduct of Business

Announcement regarding issuance of Disciplinary Board Resolution No. (48/2025 Disciplinary Board) (90/2025 Authority) and imposition of a fine against: National Investments Company, for Violating the Rules of Conduct of Business

For the following reasons:
Violation of the provision of Article 8-4 of Item 4 of Module Eight (Conduct of Business) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, this is due to its failure to comply with applicable International Accounting Standards when conducting and approving valuation reports, mainly the standards of (IAS 36) and (IFRS 13). The valuation report was flawed by the exclusion of several material inputs, indicators, and assumptions upon which market participants rely when pricing the asset, notably risk related assumptions. The report failed to consider the material changes in the associate company’s financial position and future cash flows, including the impacting circumstances it encountered. These factors were not adequately taken into account, particularly when calculating the current applied value, when reviewing the impairment of the current applied value with the book value, the fair value measurement was restored, the declared market price should have been used as the primary input, with the possibility of a reasonable amendment. However, the valuation report disregarded the declared market price for the company’s associate and its affiliates, contrary to the requirements of fair value measurement.

The Resolution included the infliction of the following penalty: -
" Levying a Fine on National Investments Company in the amount of KWD 10,000 (ten thousand Dinars) 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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