2 of Al-Khodari employees fined, 1 imprisoned: CMA

The Capital Market Authority (CMA) convicted three employees of Abdullah A. M. Al-Khodari Sons Co. on violating Article 49/A of the Capital Market Law, Article 7 of the Market Conduct Regulations, and Article 211/A of the Companies Law. They were fined SAR 3.95 million, while one was sent to jail.

A final decision was issued by the Appeal Committee for the Resolution of Securities Disputes (ACRSD) convicting Sohail Sa'eed Mohammed Sa'eed, as Director of the Financial Department, CFO Kailash Nath Sadangi, and CEO Fawaz Abdulmohsen Al-Khodari.

They inflated the revenues of four construction projects in the company's financial statements during the period from the fiscal year ended on Dec. 31, 2010 until the fiscal year ended on Dec. 31, 2017, through manipulating the application of the (Revenue Standard) and (Accounting Standard for Construction and Service Contracts) approved by the Saudi Organization for Certified Public Accountants (SOCPA), and the International Financial Reporting Standard (15) – (Revenue from Contracts with Customers).

It was also found out that the costs used in calculating the percentage of project completion differ from the actual costs registered in the Company's records, hence showing the annual financial statements for the periods in question contrary to reality, thus creating a false and misleading impression regarding the value of the company's security.