SIECO files a lawsuit against former board members, executives

Saudi Industrial Exports Co. (SIECO) has on Saturday filed a lawsuit against its former board chairman, board members and executive management for excesses referred to by the external auditor, the company said in a bourse statement.

Based on a recommendation from its current external auditor, SIECO has booked provisions for the excesses by former executives and former auditor which led to booking over 75 percent of total capital in years 2014 and 2015.

The company has also started procedures to take a legal action against the former auditor and executives and maintains its shareholders rights to claim from the former board all financial rights resulting from those violations.

SIECO noted that the current board was collecting the necessary documents to file these lawsuits.

Last week, the Saudi-listed firm’s board recommended a 90 percent capital cut to offset accumulated losses, Argaam reported.

The external auditor's report stated that pending balances from 2014 to 2015 amounting to SAR 64.6 million were included in receivables and other debit balances. The company's management has not booked provision for doubtful debts for these amounts, which affects the assessment of debtors and other receivables that will also affect the preliminary comprehensive income statement.

SIECO attributed its accumulated losses to mismanagement by the former board and executive management in failing to take the necessary guarantees to preserve the rights of the company and its shareholders.