CRSD approves 2 class actions against some Abdullah A. M. Al-Khodari executives

Logo of Abdullah A. M. Al-Khodari Sons Co.

The Committee for Resolution of Securities Disputes (CRSD) approved two class actions filed by an investor against the CEO and some employees of Abdullah A. M. Al-Khodari Sons Co. for committing some violations.

The violations included inflating the revenues in the company's financial statements for the fiscal years from 2010 to 2017, which were announced from Feb. 16, 2011 to March 31, 2018. This showed the financial statements under violation being untrue, hence creating a false and misleading impression regarding the value of the company's security. Such financial statements were proven later false based on the announcement of the company prior to market opening on Feb. 13, 2019, indicating that the company's accumulated losses reached 198.52% of capital.

The violations included the CEO's responsibility for the company's announcement published on Tadawul website on June 5, 2018 that included a false statement regarding a substantial event. This statement included amending the board's recommendation to increase capital through distributing new shares against the liabilities of the company. 

The CEO, however, dismissed the disclosure of cancelling the award of 10 projects and withdrawing them from the company during the period from May 30, 2017 to Jan. 31, 2020, in an attempt to affect the security's price or urge others to purchase the security.

The General Secretariat of the Committees for Resolution of Securities Disputes (GS-CRSD) indicated the completion of requests to join the said two class actions.

Furthermore, the GS-CRSD indicated that any person who had not submitted his request to join these two class actions, has the right to submit an individual complaint through CMA website via this Link​.