Riyadh – Mubasher: The Capital Market Authority (CMA) has announced a formal resolution to impose a fine of SAR 10,000 on Keir International Company.
The penalty follows a determination by the regulator that the company failed to comply with mandatory disclosure requirements regarding significant financial transactions involving former members of its board of directors.
The enforcement action by the CMA Board is rooted in a violation of paragraph 11 of Article 80 of the Rules on the Offer of Securities and Continuing Obligations.
These regulations, which were updated via a CMA Board Resolution on 18 January 2023, mandate that listed companies provide immediate and transparent updates to both the regulator and the public regarding material developments.
The primary objective of these rules is to maintain market integrity by ensuring that information regarding a company's financial arrangements is disseminated promptly to all stakeholders.
According to the CMA’s findings, Keir International failed to disclose two specific interest-free loans in a timely manner during the 2023 fiscal year.
The first transaction occurred on 20 June 2023, when the company received an interest-free loan totaling SAR 4.15 million Saudi Riyals. This capital was provided by the individual who served as the chairman of the board of directors for the term ending 1 November 2025. Despite the scale of this credit facility, the company did not issue a public announcement or notify the regulator immediately upon receipt of the funds.
The second violation was recorded on 5 October 2023, involving another interest-free loan in the amount of SAR 4.27 million. This facility was extended to the company by a former member of the board of directors whose term was also scheduled to conclude on 1 November 2025. As with the previous instance, this transaction was not communicated to the market or the CMA without delay, as required by the amended continuing obligations.
The regulatory requirement for immediate disclosure was triggered because both financial arrangements surpassed the materiality threshold established by the CMA.
Under the current rules, transactions must be disclosed if they exceed 1% of a company’s gross revenues. To determine this threshold, the CMA utilized Keir International’s audited annual financial statements for the period ending 31 December 2022, which represented the most recent audited data available at the time the loans were executed. Because both the June and October loans exceeded this 1% benchmark, the company was legally obligated to inform the public.
