ACRSD orders Al Mojil executives to pay SAR 90.8M to investors

Logo of Mohammad Al Mojil Group (MMG)

The Capital Market Authority (CMA) announced that the Appeal Committee for Resolution of Securities Disputes (ACRSD) issued a final decision obligating several former board members and employees of Mohammad Al Mojil Group (MMG) to pay SAR 90.8 million to 668 investors who joined a registered class action.

The case was initially approved by the Committee for Resolution of Securities Disputes (CRSD) on Jan. 11, 2024, after an investor filed a class action seeking compensation for losses resulting from company announcements later proven to be inaccurate.

According to the ACRSD, its ruling followed a referral of the case back to the CRSD to review a petition submitted by one of the respondents. The CRSD issued a decision on March 13, which became final on April 22.

The ACRSD ordered Adel Almojil, Fahad Alraqttan, and Ibrahim Zadah, individually and jointly, to compensate the investors according to the entitlements determined by the CRSD and upheld by the ACRSD.

The compensation covers damages from the company’s announcements on Feb. 22, 2012, and April 21, 2012, which included its 2011 annual and Q1 2012 financial statements.

These reports were later found to be incorrect based on the company’s Sept. 22, 2012 disclosure of its Q2 2012 results, which showed that the earlier statements gave a false and misleading view of its financial position.

The CMA underscored that investor confidence is vital to the capital market’s growth and sustainability. It continues to monitor violations of the Capital Market Law and related regulations, identify offenders, and impose deterrent penalties.

The Authority reaffirmed its commitment to maintaining a fair, transparent, and reliable investment environment, free from unfair, fraudulent, or misleading practices, and to facilitating compensation claims for investors affected by unlawful market activities.

Full details of the ruling are available on the website of the General Secretariat of Committees for Resolution of Securities Disputes (GSCRSD).