Thursday, 25 July 2024

Saudi Cables: Two Audit Committee Members Resign at President’s Request


Saudi Cable Company announced on Sunday the resignation of the two members, Mr. Majid Bin Diaa Al-Din Karim and Mr. Muhammad bin Hassan Daghestani, from the Audit Committee, starting on 18/05/2024, based on the request of the Chairman of the Audit Committee, due to that they did not disclose the signing of an existing debt capitalization agreement with the company.

As the two members signed two separate agreements to transfer two debts with an original amounting to 12,450,320 riyals, and they obtained a discount from the creditor and paid to the creditor an amount of 6,655,522 riyals in exchange for an agreement with the company to issue 1,245,032 shares to them at nominal value (ten riyals) as part of the financial restructuring plan.

According to the statement pubblished on Tadawul that tThe former CEO, Mr. Nael Fayez, signed the agreement with them without having any authority or authorization to determine the share price, and the two members did not disclose this agreement to the Board of Directors and the General Assembly of the company. Accordingly, the Board of Directors decided to accept their resignation graciously and cancel the agreement signed with them.

اقرأ المزيد

The fourth paragraph of Article Five of the Company’s “Conflict of Interest Policy and Code of Conduct and Ethics regulations” stipulates: (If a member of the Board of Directors or a member of one of committees did not disclose his interest, the Company or any interested party may demand before the competent judicial authority to invalidate the contract or oblige the member to perform any He gained profit or benefit from that, and the company may terminate his membership – if he is not a member of the Board of Directors – or terminate his employment contract, and if he is a member of the Board of Directors, the Board of Directors may recommend to the general assembly to remove him).

The text of the resignation of the two members stated that they resigned due to work commitments and personal circumstances, wishing the company success and prosperity.

The company confirms that it will take the necessary legal procedures against those who violate the company’s interests and the rights of its shareholders, according to the applicable regulations, which protect the company’s rights and the interests of its shareholders.

addionaly, Saudi Cable Company announced the cancellation of legal consultation contract with the company’s lawyer (Dr. Wael Bafaqih & Partners Company), for the following reasons:

1- The company’s lawyer’s requesting in writing to grant him 18% of the company’s total current shares by holding a special extraordinary general assembly to vote on increasing the capital by granting him 1,220,000 shares based on converting his alleged debt into shares at a price of (16 riyals per share), alleging that there is a contract signed with the company represented by the former CEO, Mr. Nael Fayez, granting him this right.

By reviewing the aforementioned contract, the company’s management found that it was agreed with the lawyer’s office and the company, represented by the former CEO, Mr. Nael Fayez, to grant the company’s lawyer 2.5% of the total claims of the creditors who were identified during the financial restructuring procedures (FRP) carried out by the company and the FRP trustee, and after referring to the ruling issued by the Commercial Court in Jeddah, Fourth Circuit, in Case No. 103, dated 6/8/1444, it turns out that the ruling stipulates that the one who listed the creditors and submitted them to the court is the FRP trustee not the company’s lawyer, as stated in the ruling: (The circuit ruled to approval of the list of claims included in Application No. 131 submitted by the procedure trustee, Walid Muhammad Subhi, in the bankruptcy case (103 of the year 1444 AH) according to the reasons included).

2- The company’s lawyer made legal recommendations that he included in the financial restructuring plan against the interests of the company’s shareholders, based on an agreement with the previous executive management. These unfair recommendations may cause the shareholders huge losses if they are implemented.

Accordingly, the company terminated the proxy granted to the company’s lawyer (Dr. Wael Bafakih Legal Consultations Company), and canceled the contract signed with him.

The company confirms that it will take the necessary legal measures in accordance with the applicable regulations, which protect the rights of the company and the interests of its shareholders..