Weqaya Takaful receives non reliance letter from auditors

Ernst & Young (EY) and Deloitte & Touche, the external auditors hired by Saudi Arabian Monetary Agency (SAMA) to audit Weqaya Takaful Insurance and Reinsurance Company’s financials, advised that further reliance should no longer be placed on its previously issued audit reports relating to the Company's financial statements for the year ended December 31, 2013 and the preliminary financials of Q1-2014.

The two accounting firms issued the non- reliance letter based on their conclusion that the financial statements for the year ended December 31, 2013 contain material information that will raise the accumulated losses for the year then ended to 105% of the company’s capital; Weqaya said in its filing to Tadawul today

The auditors believe that the company failed to record some incurred claims related to car insurance and health insurance policies amounting to SAR 20m and SAR 24m respectively.

As per the Saudi Accounting Standards and IFRS, the misstatements will be corrected on Q2-2014’s financials rather than reissuing the financial statements of the year ended December 31, 2013 and the preliminary financials of Q1-2014; the company added.

Weqaya Takaful said that such information will not affect the company’s liquidity position as the amounts have been already paid in previous periods.

According to Argaam’s data; the Capital Market Authority suspended weqaya’s shares on June 4, 2014.