9 Raydan board members convicted of violating Companies Law, fined SAR 36M

Hassan Alsahafi, Abdulraouf Alqaidi, Saud Alsulami, Muhammad Alsulami, Khalid Alsulami, Mish'al Alsulami, Nasser Alsulami, Mansour Alsulami, and Awadhallah Alsulami were all convicted under the ACRSD’s final decision, the market regulator said in a statement today, Aug. 15.

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The final decision was issued after it was evidenced that the above-mentioned individuals, in their capacities as Raydan Food board members, used the TASI-listed company's funds to favor Aljonah Co.’s two owners, one of which is a former Raydan Food board member while both are family relatives with some of those convicted. This is by signing a partnership agreement between the two companies on Sept. 1, 2018, under which Raydan Food owned 30% of Aljonah and another 30% of Aljouna's 90% stake in Al Hanaa Sweets Factory.

In addition, the convicted individuals have not demanded to re-register the additional financing and general reserve in Aljonah’s annual financial statements for 2018, despite being transferred to the retained earnings account and distributed among the latter’s partners as per their share in the company's capital pre-entry of the new partner (Raydan Food) and pre-investment re-valuation.

The convicted also disregarded factoring in the value of Raydan Food’s investment as an increase in Aljonah’s capital but instead transferred the amount to the current accounts of Aljonah’s previous owners. Consequently, this implied a misleading impression of Raydan Food’s financial position, while inflating Aljonah’s value.

Any person affected by these violations is entitled to file a compensation claim (as individual or class action) against those convicted with the CRSD for the damage they suffered from these acts, provided that such claim is preceded by a complaint filed with the CMA in this regard.

The General Secretariat of the Committee for Resolution of Securities Disputes (GS-CRSD) will make a public announcement on its website in case of registering any class action in order to enable other investors affected by such violations to file with the CRSD to join the class action.