Saudi Paper former ex-board members, execs fined SAR 1.2 mln

Logo of Saudi Paper Manufacturing Co.

The General Secretariat of the Committees for Resolution of Securities Disputes (GS-CRSD) announced the resolution of the Appeal Committee for the Resolution of Securities Disputes (ACRSD), dated Feb. 2, in the public penal case against several former board members and senior executives including some auditors at Saudi Paper Manufacturing Co. (SPM). 

The case was referred to the Public Prosecution by the Capital Market Authority (CMA).

In its statement, the GS-CRSD said that chief financial officer, Hassan Halloum; board members, Adeeb bin Abdulrahman Alsuwailem, James Phipps, Muhammad bin Abdullah Alkhorayef, Azzam Alkhail, Abdulrahman Al-Obaid, Musa Alrubai'an, and Abdulaziz Aljarbou; audit committee member, Ali bin Suleiman bin Ayed Ala'ed, and former Board Chairman Abdullah Al Saud were all convicted of violating Article (49/a) of the Capital Market Law.

The previously mentioned members were convicted of recognizing capital gains from a sale transaction in violation of the accounting standards endorsed by the Saudi Organization for Chartered and Professional Accountants (SOCPA).

As such, a total of SAR 115.76 million were recognized as capital gains in SPM’s annual financial statements for 2012, giving untrue financial position of the company and creating a false impression of the stock value.

As a result, the losses incurred by SPM during 2012, which resulted from the decrease in the value of receivables, goods and investments by SAR 97.27 million were covered, leading to a net profit of SAR 102.11 million in 2012.

This had positively impacted the stock price and avoided the negative effect which would had supposed to happen.

The former CFO was fined SAR 200,000 and was banned from working in Tadawul-listed companies listed for two years. The other board members, audit committee member and former Board Chairman were slammed with a fine of SAR 100,000 each.

Moreover, the GS-CRSD added that any person affected by these violations in this case is entitled to file a compensation claim (as individual or class action) with the CRSD for the damage suffered from these violations, provided that such claim is preceded by a complaint filed with the CMA on this regard, via the following link: (File Complaint).

The GS-CRSD will make an announcement in case any class action is filed, in order to enable the rest of investors affected by such violations to join the class action.