Mobily, MMG shareholders urged to file class action lawsuit

Shareholders in Mobily and Mohammad Al-Mojil Group (MMG) two Saudi-listed companies which have come under scrutiny over erroneous accounting, should file a class action lawsuit before the Board of Grievances to speed up the compensation process, lawyer Abdel Wahab Al-Issa said during a lecture in Riyadh Chamber of Commerce on Sunday.

He added that such companies negatively impact the reputation of the Saudi stock market.

The Capital Market Authority, the kingdom’s market regulator, has suspended several companies in the past few years for insider trading or other law violations.

Mobily (Etihad Etisalat Co.), Saudi Arabia’s second-biggest mobile operator, in February revised its full-year profit down from SAR 219 million to net loss of SAR 913 million. The company attributed the dramatic change to accounting errors.

Last month, a lawyer representing some MMG shareholders said his clients expected to receive SAR 1.5 billion in seized assets owned by the company’s former chairman. Banks were also said to get their dues upon the liquidation process.

MMG said in April that accumulated losses were SAR 3.38 billion, or 271 percent of share capital.