Kuwait Capital Markets Authority fines two former International Company for Real Estate Cities board members KD 10000 each for corporate governance breaches

The Kuwait Capital Markets Authority announced a Disciplinary Board resolution imposing financial penalties on the former vice chairman and a former board member of International Company for Real Estate Cities for breaches of the corporate governance rules. Each was fined KD 10,000 for failing to perform board duties required under Article 3-1 of Module Fifteen of the Executive Bylaws of Law No. 7 of 2010 and its amendments. The findings covered weaknesses in investment oversight and the company’s administrative structure. The company entered one investment without prior feasibility studies, had not generated any profit from that investment from 10 May 2014 until the end of the inspection, took no action to curb losses or exit, and had no official documents showing that project establishment procedures had begun. In an associate company investment, the value fell by KD 544,114 to KD 6,955,886 from an initial KD 7,500,000 as of the financial statements for the period ended 31 December 2020, again without steps to limit losses or exit, while insufficient liquidity delayed construction. The authority also cited the absence of a compliance officer, an investor affairs unit officer, a risk management manager and qualified staff for that function, an internal audit manager and qualified staff for that function, and sufficient administrative and operational personnel to manage the company.