By Naser:
I came about an article about a Chairman of a Saudi company being jailed and fined for insider trading:
“A Saudi financial court has taken the unprecedented step of slapping a jail sentence on a violator of stock market rules, after the chairman of Bishah Agricultural Development Co was found guilty of insider trading.
According to a statement published on the Capital Market Authority’s website, the Committee for the Resolution of Securities Disputes has issued a final verdict against Najm-Eddine Ahmad Najm-Eddine Dhafer, sentencing him to three months in jail.
The CRSD’s ruling found Dhafer “guilty of insider trading in Bishah shares based on him being the Chairman of the company’s board”, CMA said.
He was sentenced to 3 months in jail and fined of SR 100,000. Further, he was also banned from working for any listed firm for five years. Dhafer also has to deposit the SR 52,690 he profited from the illegal stock sales in CMA’s account.
Bishah was involved in the processing of dates and in the cereal seeds business before CMA suspended its stock from trading in January 2007 after it posted a 2006 net loss of SR 38 million, exceeding the regulatory 75% of its paid-up capital. The measure reduced Bishah’s 400 million riyals market value to nil and left some 10,000 shareholders in limbo, according to traders familiar with the company.
The Bishah sentence is not the first, and hopefully not the last. The Saudi Authorities in July found Mohammed bin Ibrahim bin Mohammed Al Issa guilty of insider trading activities in shares of the Saudi Hotel Company, using information based on his membership of the company’s board. He was fined SR 100,000, and was ordered to pay back to the Saudi watchdog SR 3.3 million; the amount the CMA said he made in profit from the insider share trading. Mr. Al Issa is no small fish as he is considered the third largest retail investor in Saudi Arabia (behind Al Waleed and Sulaiman Al Rajhi), and holds key investments in Saudi Hotels Company, Savola, Riyad Bank and Calyons, the subsidiary of Saudi Fransi Bank.
I applaud the actions of Saudi regulators, and I hope that these actions would lead to a more transparent market. I personally think that we need this type of courage in Kuwait to limit insider trading and improve the efficiency of the market. The Kuwait Stock Exchange is in dire need for a regulatory commission.
(No Ratings Yet)
Loading ...Tags: Capital Market Authority, Insider Trading, KSA, Saudi Arabia, Saudi Company Chairman fined jailed
Great Naser. I hope that together we can work and push for the establishment of a Capital Market Authority in Kuwait and other GCC nations. I commend the Saudi step and home Kuwait and other GCC countries would soon follow the Saudi steps! Such action adds much needed credibility to markets plagued by lack of ethics and insider trading.
[Reply]
Definitely and who knows we may be considered as an Emerging Market, and have the added exposure
[Reply]