CMA says Wafa Insurance faces termination if EGM not held before Sept.11

The Capital Market Authority (CMA) on Monday said that Saudi Indian Company for Cooperative Insurance (Wafa Insurance) will be terminated on Sept.11, under the Saudi Companies Law if it fails to hold an extraordinary general assembly meeting within 45 days from the date its board of directors were informed of losses.

Wafa would be terminated by force of law, if the EGM failed to issue a decision on dissolving the company, or if investors failed to subscribe to the company's full capital within 90 days from the shareholders' decision date.

In a separate statement, the Saudi Arabian Monetary Authority (SAMA) said Wafa is not allowed to cut capital, as its losses account for the minimum limit of capital required for carrying out insurance business.  

The insurer has to obtain the required regulatory approval before raising its capital.

Wafa shares will be immediately delisted, when the company is terminated or dissolved, the insurance market regulator added.

Last month, the insurer said accumulated losses rose to SAR 58.06 million representing 58.06 percent of its SAR 100 million capital, Argaam reported.