Saudi Arabia fines Saudi German Health officials over SR358 million accounting violations

Saudi Arabia’s Capital Market Authority (CMA) said an appeals committee had issued a final decision convicting 11 board members and audit committee members at Middle East Healthcare Company, owner of Saudi German Health hospitals, over violations of the Capital Market Law and Market Conduct Regulations linked to inflated revenues and misleading financial statements.

The CMA said the violations involved recognising revenues worth SR358.04 million despite the board and audit committee’s awareness of the low likelihood of collecting those dues, creating what it described as a false and misleading impression of the company’s book value.

According to the regulator, the violations covered financial statements from the period ending December 31, 2018, through the interim period ending September 30, 2021, resulting in the artificial inflation of revenues and assets and the inclusion of inaccurate information in the company’s financial disclosures.

The CMA said the convicted individuals were fined a combined total of about SR18 million and banned from working in entities supervised by the authority for periods ranging from six months to one year.

The regulator added that the final ruling was issued in coordination with relevant authorities and in connection with a public criminal case filed by the Public Prosecution after being referred by the CMA in March 2024.

It said investors affected by the violations could file individual or collective compensation claims before the Committee for Resolution of Securities Disputes after first submitting complaints to the authority.