NATPET: Alujain makes 'false' claims, hides real reasons for its failure to disclose quarterly results

The National Petrochemical Industrial Co. (NATPET) has explained the reasons for not issuing its quarterly financial results.

Following is the company's full statement to Argaam.

Alujain Corp's bourse statement on Sept. 24 made false claims about NATPET, as it was based on baseless facts that hide the real reasons behind Alujain's failure to publish its financial statements for the period ending on June 30, 2019 and also behind the trade suspension placed on its stock.

NATPET has avoided responding to Alujain's repeat accusations. However, NATPET informed the Ministry of Commerce & Investment, and the Saudi Capital Market Authority (CMA) of all violations included in Alujain statements, which held NATPET accountable for the company's failure to publish its quarterly financials.

Accordingly, NATPET aims to unveil the following facts:

1) NATPET's board of directors has approved Alujain's request to hold a general assembly meeting on June 24, 2019 and vote for issuing quarterly financial statements to the company's shareholders. Alujain, which owns 57.4 percent of NATPET, had surprisingly voted against obligating NATPET's board to issue quarterly financials. In the same vein, Alujain issued false statements, claiming that NATPET rejected holding a general assembly meeting to vote on Alujain's proposal, which in turn hindered the Saudi-listed company from disclosing its quarterly figures.

2) Alujain has recently claimed that it had no knowledge of NATPET's articles of incorporation, which refer to an agreement between NATPET's founding shareholders that the voting rights of any shareholder shall not exceed 20 percent of the company's total shares regarding shareholders' decisions about board dismissal or amendment to the articles of incorporation.

Alujain had earlier approved NATPET's articles of incorporation.

3) The Saudi courts have rejected three lawsuits, which were filed by Alujain to appeal NATPET's articles of incorporation and the related amendments. These judgments were final.

4) Alujain also paid no heed to the administrative and industrial court decisions about the validity of NATPET's articles of incorporation since inception, and filed lawsuits to appeal those rulings.

5) Alujain rejected NATPET's recommendation about having representatives in NATPET's board of directors, so as to regularly access the latter's work progress. NATPET appointed Alujain's Jamil bin Jamil Othman Sifrah on its board. The appointment was approved by NATPET shareholders and Alujain.

6) Alujain's shareholders, in the extraordinary general assembly meeting held on Sept. 10, 2017, approved amendment to the company's articles of incorporation about raising the voting rates required to dismiss the board and amend the company's articles of incorporation to 65 percent and 75 percent, respectively. Meanwhile, Alujain rejected similar amendments to NATPET's articles of incorporation, claiming that those amendments will affect Alujain's shareholders.

7) Alujain held NATPET accountable for its failure to disclose the quarterly financial statements and for the trade suspension placed on the stock in several bourse statements. According to NATPET:

(A) On Aug. 17, 2017, Alujain failed to publish its figures on time as it had not appointed an external auditor. The stock was then suspended.

(B) On Sept. 19, 2017, Alujain's stock was suspended due to misstatement of the company's financial results.

(C) On Aug. 5, 2018, Alujain said NATPET's failure to deliver its Q2 2018 financials was the reason behind the company's failure to disclose its quarterly results. Actually, Alujain's failure to disclose its financials on time and the trade suspension was related to a disagreement between Alujain and its external auditor.

(D) On Mar. 31, 2019, Alujain repeated the same claims but the stock was suspended due to a disagreement between Alujain and its external auditor.

(E) On May 8, 2019, Alujain repeated the same claims though NATPET had submitted its financial statements to Alujain's external auditor on May 7, 2019 and May 8, 2019.

NATPET has been always keen to focus on developing its operations instead of responding to those claims. However, the company had to issue this statement to clarify the situation to its shareholders.

NATPET is keen to cooperate with Alujain to protect the interests of its shareholders, pursuant to the applicable laws.