Kuwait Capital Markets Authority issues disciplinary fines for Arabi Holding Group and senior officials over disclosure and corporate governance breaches

The Kuwait Capital Markets Authority has issued a Disciplinary Board resolution imposing financial penalties on Arabi Holding Group Company, multiple directors, and its chief executive officer and chief financial officer for violations of disclosure, transparency, and corporate governance requirements. The breaches included failing to disclose on Boursa Kuwait the full settlement of amounts due to related parties (major shareholders) totalling KWD 7,430,316, and publishing a supplementary disclosure on 4 November 2024 that the Authority considered misleading because it provided commentary without new material information concerning a Court of Appeal judgment in ongoing litigation. The company was also found to have continued breaching listing-rule financial reporting requirements in its financial statements for the year ended 31 December 2023, including recognising inventory of KWD 22,594,301 without control or expected benefits (referencing International Accounting Standard IAS 2 and the financial reporting conceptual framework) and not applying International Financial Reporting Standard 9 provisioning for receivables outstanding for more than 365 days. Arabi Holding Group was fined KWD 5,000 for the first and third breaches combined and KWD 10,000 for the misleading supplementary disclosure. The chairman, vice chairman, two independent directors, one non-executive director, and the chief financial officer were each fined KWD 5,000, while the chief executive officer was fined KWD 10,000.