First Mills says fined SAR 6.3 mln in lawsuit filed by GFSA

Logo of First Mills

First Milling Co. (First Mills) said it received, on Sept. 25, decision number (2) issued in case number (4) for the year 2023 from the committee in charge of reviewing the violations arising from the implementation of the provisions of the Flour Mills Law, in relation to the lawsuit filed by the General Food Security Authority (GFSA). 

The fine imposed was SAR 6.3 million against the nearly SAR 70 million requested by the authority. 

In a statement on Tadawul, First Mills indicated that it will follow up and discuss subsequent procedures, including the right to appeal the decision to the Administrative Court within 60 days from the date of notification of the decision, in accordance with the provisions of Paragraph (3) of Article 27 of the Flour Mills Regulations.  

The company added that GFSA filed a lawsuit, claiming First Mills violated one of the terms of the agreement to supply subsidized and non-subsidized flour and one of the terms of the license granted to it by GFSA. The lawsuit was reviewed by the committee. This is in addition to exceeding the sales quantities permitted by GFSA. First Mills was notified of this lawsuit on April 2, 2023. 

Accordingly, GFSA requested imposing a fine of SAR 69.76 million against the company. 

On April 30, First Mills submitted a memorandum in response to the lawsuit submitted by GFSA before receiving a response on Sept. 25, confirming that a fine totaling SAR 6.30 million has been imposed as opposed to the previously mentioned amount of SAR 69.76 million. 

There is no financial impact as the company booked a provision of SAR 8.85 million as part of the expenses due in the FY 2022 statement. 

First Milling confirmed that it respects the committee's decision and affirmed the integrity of its procedures and its full compliance with all regulations and laws set by regulatory authorities, including GFSA, to safeguard the rights of its shareholders and customers.  

The company also looks forward to advancing its vision of becoming the first choice and preferred partner in both the food and feed sectors and the reliable source of vital products for the markets and communities in the region. 

Any subsequent actions in this regard, if any, will be shared, First Mills said.