Saudi regulator allows Mobily victims to file collective complaint

Abu Dhabi: The General Secretariat of the Committees for Resolution of Securities Disputes said it has approved a request submitted by an investor to sue senior executives of Etihad Etisalat Company (Mobily), convicted by the Appeal Committee in Securities Disputes.

The Capital Market Authority clarified to traders and investors that any person who bought the company’s shares after announcing its initial financial results for the second quarter of 2013 that included misleading and incorrect data, on July 16, 2013 until the share was suspended on March 11, 2014, has the right to join the lawsuit, within 90 days of the date of this announcement, via an electronic link.

In 2017, Saudi Arabia’s market regulator said a lawsuit was filed against individuals related to an accounting scandal at telecoms group Mobily.

The public prosecution filed the suit in the Committee for the Resolution of Securities Disputes, which has jurisdiction over the dispute.

The CMA did not name the suspects nor say how many were involved.

It said the suspects had earlier been referred on suspicion of violating Article 49 of Saudi Arabia’s Capital Market Law, which relates to creating a false or misleading impression of a company’s value.

The lawsuit follows an investigation launched by the CMA after Mobily restated 27 months of earnings due to accounting errors related to the premature booking of revenue from wholesale broadband leases and mobile promotional campaigns.

The restatements cut 1.76 billion riyals ($469 million) off the profits made during that time by the company, which is partly owned by Abu Dhabi-based Etisalat.

In January 2017, Saudi Arabia’s Committee for the Resolution of Securities Disputes (CRSD) found a number of individuals guilty of providing insider information and of insider trading in Mobily’s shares.