Al Jouf Cement recommends filing liability lawsuit against former board members

A manufacturing facility of Al Jouf Cement

Al Jouf Cement Co. announced that the board of directors decided to submit a recommendation to the company’s general assembly to vote on authorizing its management to file a liability suit against three former board members who were directly involved in the decision to invest in Eastern Industrial Co. (EICO).

According to a statement on Tadawul, Al Jouf Cement appointed an accounting and audit firm to audit financial transactions and contracts that may contain violations or administrative irregularities that caused financial damage to the company and affected its results in previous periods.

The appointed auditor is currently conducting a comprehensive study of all financial operations and contracts that may contain irregularities from the listing date until mid-2022.

The auditor submitted a detailed report on the first case related to investment in EICO - a company under liquidation.

The report concluded that the company lost the entire investment of SAR 136 million; the transaction with related parties was done with the approval of the company’s general assembly and suspected forgery of the former deputy chairman’s signature to approve the investment in the project.

The report also found that the company’s funds invested violated its bylaws. In addition, it included misleading information about investment in the project, violation of the powers outlined in the company's bylaws by the members in charge and failure of the members in charge to reimburse the project's development expenses worth SAR 6 million. 

Moreover, shareholders were deceived by not announcing losses in the financial statements at the appropriate time. 

The statement indicated that the auditor is still inspecting, reviewing, and auditing all the company’s records in coordination with the company’s management. 

The cement producer will inform its shareholders upon submitting the auditor’s report on each suspicious case. 

There is no impact on current financial statements, Al Jouf Cement said, affirming the management’s keenness to enhance the transparency and disclosure levels. 

The company will take all necessary measures to preserve its interests and the rights of its shareholders.