Riyadh – Mubasher: The Saudi Capital Market Authority (CMA) has announced that the Committee for Resolution of Securities Disputes (CRSD) accepted a request to register a class action lawsuit against several officials in Raydan Food Company, according to an official statement.
The decision, identified as No. 28/L/D2/C/2026, was issued on 12 May 2026, and stems from a prior final decision against members of the Board of Directors and the Audit Committee of Raydan Food by the Appeal Committee for Resolution of Securities Disputes (ACRSD) dated 3 June 2024.
The legal proceedings follow allegations of regulatory violations that created a misleading impression of the company’s financial position, potentially impacting the valuation of its securities over multiple fiscal years.
According to the regulator, the officials involved were found to have violated Article 49/a of the Capital Market Law. This article prohibits acts and procedures that intentionally create a false or misleading impression regarding the value of a security. The case centers on the company’s failure to adhere to International Accounting Standard (IAS) 36, titled Impairment of Assets, which is approved by the Saudi Organization for Chartered and Professional Accountants (SOCPA).
The investigation revealed that the defendants approved consolidated financial statements for the fiscal years 2018, 2019, and 2020, despite having prior knowledge of violations within those records.
Specifically, the officials failed to accurately evaluate the investment effects of Raydan Food’s dealings with Aljonah Company. Furthermore, they did not account for losses resulting from the decline in the value of the company’s assets. These omissions were not reflected in the consolidated financial statements, despite repeated reservations expressed by the company’s external auditor over three consecutive years. The CMA maintains that these actions were intended to influence the company’s share price during the specified periods.
In light of these findings, the CMA has outlined the eligibility criteria for investors wishing to join the class action. Any individual who purchased shares in Raydan Food starting from 29 March 2019 and maintained ownership until the end of the trading day on 30 March 2022, which is the date the company announced the correction of its financial statements, is entitled to participate.
Eligible investors have a 90-day window from the date of the CMA’s announcement to submit a request to the CRSD to join the lawsuit, in accordance with Article 57 of the Resolution of Securities Disputes Proceedings Regulations.
The CMA reaffirmed its commitment to maintaining the integrity of the Saudi capital market by enforcing the Capital Market Law and its implementing regulations. The regulator emphasized that protecting investors from fraudulent or manipulative practices remains a primary objective.
By facilitating class action procedures, the CMA aims to streamline litigation, reduce costs for affected parties, and ensure that compensation is distributed efficiently. This move underscores the regulator’s broader strategy to enhance transparency, fairness, and efficiency within the Kingdom’s financial markets while providing robust mechanisms for investors to exercise their legal rights.
It is worth noting that Raydan Food recently witnessed the resignation of Adel Shamsuddin Siddiqui from his position as the Chairman and Member of the Audit Committee, effective 1 June 2026.
