GACO says appeal court upholds ruling against former board member

Logo of Al Gassim Investment Holding Co. (GACO) 

Al Gassim Investment Holding Co. (GACO) said the Court of Appeal in Qassim Region issued a final ruling in the company’s favor in a financial lawsuit against former board member and authorized representative Abdullah Al-Mahous.

In a Tadawul statement, the company said the case concerns its authorization of Al-Mahous to complete the issuance of title deeds for two agricultural land plots within its Al Jouf agricultural project, in line with its obligations under the project sale agreement with Fakieh Poultry Farms.

A financial reward was approved for Al-Mahous based on the completion stages of the assigned work, with the remaining amount to be paid upon full transfer and final handover of the project.

Based on his written undertaking to complete the title deed procedures and finalize the transfer to the buyer, he was paid the remaining SAR 200,000 incentive amount.

The company later discovered, without its knowledge, that after completing the title deed procedures for the two agricultural plots, the defendant used the powers of attorney granted to him to transfer ownership of the two properties to a former company employee.

The employee subsequently transferred one of the properties to Al-Mahous, while retaining ownership of the second property.

GACO said it was unable to recover and transfer the two properties to Fakieh Poultry and receive SAR 3.88 million in sale proceeds, except through lawsuits filed against the defendant, which resulted in final rulings confirming that the two properties belonged to Fakieh Poultry.

The company said this constituted a breach of Al-Mahous’ obligations regarding the two properties and invalidated his entitlement to the remaining SAR 200,000 incentive payment that had already been disbursed to him.

It added that before filing the lawsuits, the defendant had informed the company that title deed procedures were still incomplete and required additional time and financial requirements. However, it became clear later that the deeds had already been finalized and disposed of.

After the lawsuits were filed, Al-Mahous also disputed ownership of the properties despite having received compensation for completing the title deed procedures and transferring them to the buyer.

Accordingly, the company filed a lawsuit against the former board member, seeking repayment of SAR 200,000, citing his failure to fulfill the conditions tied to the payment and its commitment to preserving shareholders’ rights.

GACO noted that the court established the defendant had caused damage to the company through the delayed receipt of proceeds from the buyer. A reasoned judgment was issued confirming that the defendant had not fulfilled the obligation and that the property transfer was completed pursuant to court rulings.

The ruling was upheld by the Qassim Court of Appeal, obliging him to repay the full claimed amount due to lack of entitlement. The company said it will take the necessary legal procedures to enforce the judgment and noted that it had appointed an external lawyer to provide legal consultations and represent it in the case.

The company expects a positive financial impact of SAR 200,000 from the case.