Al-Khodari CEO, some staff ordered to pay SAR 85M in compensation: CMA

Logo of Abdullah A. M. Al-Khodari Sons Co.

The Capital Market Authority (CMA) announced today, March 26, that the Appeal Committee for the Resolution of Securities Disputes (ACRSD) has issued two rulings obligating the CEO and certain employees of Abdullah A. M. Al-Khodari Sons Co., to pay approximately SAR 85 million in compensation.

The defendants, Fawaz Al-Khodari, Suhail Saeed, and Kailash Sadangi, are required to compensate affected investors who joined the class action lawsuits, as per the entitlements upheld by the ACRSD.

According to the CMA statement, the committee convicted the violators in two separate rulings for inflating revenues in the company's financial statements. These violations occurred during fiscal periods from Dec. 31, 2010, to Dec. 31, 2017, and were announced between Feb. 16, 2011, and March 31, 2018.

This manipulation presented a false reality of the company's financial position and created a misleading impression of the stock value. The inaccuracy of these statements was confirmed on Feb. 13, 2019, when the company announced that its accumulated losses had reached 198.52% of its capital.

The final decisions established the CEO's responsibility for a misleading announcement published on the Saudi Exchange (Tadawul) on June 5, 2018. The announcement contained a false statement regarding a material development (the amendment of the board’s recommendation to increase capital through a bonus issue against liabilities).

Furthermore, the CEO failed to disclose the cancellation and withdrawal of 10 projects between May 30, 2017, and Jan. 31, 2020, intending to influence the company’s stock price and induce purchases.

The CMA emphasized that investor confidence is the cornerstone of market growth. It remains committed to enhancing litigation mechanisms, such as class action lawsuits, to streamline compensation for large groups of investors with unified legal positions.

This framework is designed to shorten the time required for settlements, reinforce the efficiency of specialized committees, and organize investor efforts within a more effective procedural structure.

Full details are available on the General Secretariat of the Committees for Resolution of Securities Disputes (GS-CRSD) website:

GS-CRSD Announcement – Click here