Loss-making firms said to face liquidation under new Saudi law

Saudi Tadawul-listed companies that have accrued losses of over 50 percent of capital will be forced into liquidation under a new corporate law, unless they fix their finances within a specific period.

The new law, which will include large changes in regulations, will be issued in early May, Alriyadh daily reported on Wednesday, citing Mohammed Al-Jadaan, chairman of Saudi Arabia’s Capital Market Authority (CMA).

New amendments will also be introduced to the foreign direct investment law in 2017, Al-Jadaan added at a forum for family-owned businesses.

The market regulator is also reviewing the rules relating to initial public offering so as to encourage family businesses to convert into joint stock companies.

According to data compiled by Argaam, 11 companies have losses exceeding 50 percent of their capital:

- Saudi Indian Company for Cooperative Insurance (Wafa Insurance)

- Al Ahlia Cooperative Insurance

- Etihad Atheeb Telecommunication

- Solidarity Saudi Takaful Co.

- Amana Cooperative Insurance

- Saudi Enaya Cooperative Insurance

- Saudi Fisheries Co.

- Sanad Insurance and Reinsurance Cooperative Co.

- Al-Baha Investment and Development Co.

- Bishah Agriculture Development Co.

- Mohammad Al Mojil Group.