Troubled contractor MMG appeals to Prince Mohammed

Troubled Saudi contractor Mohammad Al Mojil Group (MMG) has appealed directly to the kingdom’s Deputy Crown Prince Mohammed bin Salman, explaining that it may not be able to continue operations, given its financial woes.

In a statement to the Saudi stock exchange Tadawul, MMG said that “serious financial losses” had generated doubts over its ability to operate.

The builder also noted other obstacles in the form of constraints imposed by banks and the governments, as well as legal restrictions preventing it from speaking out publicly about proposed solutions to its problems.

The statement did not specify the nature of assistance – financial or otherwise – that MMG is seeking from Prince Mohammed.

The prince chairs Saudi Arabia’s Council of Economic and Development Affairs, which is overseeing the implementation of the Vision 2030 initiative.

MMG’s shares have not traded on Tadawul since July 2012, when the stock was suspended by the Capital Market Authority (CMA) over its losses after it over-extended itself trying to take advantage of a construction boom in the kingdom.

The firm has tried to restructure itself since then, partly through seeking payment of hundreds of millions of riyals it is owed for completed work.

Earlier this week, MMG’s entire board resigned due to its inability to clear the current bottlenecks, the company said in a bourse statement, adding that the resignation will be effective as of today (Nov. 21).

The contractor also saw a board resignation in June this year, after it was fined SAR 1.6 billion by the stock market regulator and three of its top executives were sentenced to prison.

The CMA’s Committee for the Resolution of Securities Disputes determined that three people, including the founder Mohammad Al Mojil and his son Adel Al-Mojil, the chairman, guilty of manipulation and fraud relating to the family-controlled company's initial public offer in 2008.