Alujain CEO says NATPET should’ve approved dividend rather than acquisition

National Petrochemical Industrial Co.’s (NATPET) minority shareholders rejected distributing SAR 107 million dividends under the pretext of insufficient liquidity, though they approved injecting SAR 200 million in acquiring shares of Alujain Corp to control its board of directors, Khaled Al-Dawood, Alujain CEO, told Argaam in an exclusive.

NATPET should have paid dividends to its shareholders.

To justify their decision, NATPET’s minority shareholders cited a court ruling on distributing no dividends due to a claim filed by some shareholders against the company.

Al-Dawood said that the claim was actually filed by only one shareholder, who owns 20 shares out of the company’s 107 million shares, based on NATPET’s records as of Apr. 9, 2017.

The claim was filed by NATPET’s lawyer, who is also a minority shareholder, and the court ruling was not final.

Meanwhile, that lawyer has also filed another claim against NATPET to amend its articles of association, so that general assembly decisions will only be issued, when approved by 75% of shareholders.

This suspicious claim aims to deprive the shareholders from the long-awaited payouts, though the company was sitting on a cash of over SAR 600 million at the general assembly meeting time.

It is worth noting that NATPET has also received additional funds from the insurance company, Al-Dawood added.

Accordingly, NATPET’s board violated Article No. 36 of the unlisted companies’ regulations regarding non-payment of dividends 15 days after the general assembly decision, which voted with a 70% majority on June 24, 2019.

NATPET’s lawyer brought a claim against NATPET on July 29, 2019, moving the court to scrap the shareholders’ decision on dividend payment.

As NATPET failed to pay sufficient dividends, Alujain distributed dividends to its shareholders at SAR 1 per share for one time only in over 20 years, the official clarified.

Al-Dawood added that Alujain did not vote against its previous request for getting NATPET’s quarterly financial statements, describing this allegation as baseless.

The Tadawul-listed company had earlier objected to the changes made by NATPET about submitting its financial statements before and during its general assembly meeting, with all objections registered in the Ministry of Commerce and Investment.

Al-Dawood added that Alujain’s board proposed converting Alujain into a holding company, based on the legal adviser’s recommendation.

The conversion aims to align the company’s business with the activities of the labor bureau and the Industrial Standard International Classification (ISIC).

Otherwise, Alujain might be suspended by the official authorities, Al-Dawood concluded.