Al-Jouf Cement: Recommendation to file liability lawsuit against former BOD members for involvement in SAR 136 million loss of investment

Al-Jouf Cement Company announced the appointment of a specialised Audit Firm to audit the financial transactions and contracts that may involve violations or administrative irregularities affecting financial damage to the company and its results in previous periods.

The Company affirmed in a Statement on Tadawul that the appointed auditor is currently conducting a comprehensive study of all financial operations and contracts that may contain irregularities since the company’s listing in the financial market until mid-2022.

The auditor has presented a detailed report on the first case related to the investment in the “Eastern Industrial Company” – a company under liquidation. The report concluded the following:

1- Loss of the entire investment amounting to one hundred and thirty-six million Saudi Riyals SAR 136 million.

2- Transactions with related parties without the approval of the company’s general assembly.

3- Suspected forgery of the former deputy chairman’s signature to approve the investment in the project.

4- Company funds invested in violation of the company’s purposes in Bylaws.

5- Providing misleading information about the investment in the project.

6- Violation of the powers outlined in the company’s Bylaws by the members in-charge.

7- Failure of the members in-charge to reimburse the project’s development expenses, amounting SAR 6 million.

8- Deception of shareholders by not announcing losses in the financial statements at the appropriate time.

Accordingly, the Board of Directors decided to submit a recommendation to the company’s General Assembly to vote on authorizing the company’s management to file a liability lawsuit against the responsible individuals (Three former board members) directly involved in the decision to invest in the Eastern Industrial Company.

The auditor is still inspecting, reviewing, and auditing all company records with continuous coordination and follow-up by the company’s management. Once the report on each suspected case is finalized, the company will announce it to all shareholders.

It is worth noting that there is no impact on the current financial statements of the company.