News developments Archives - Page 44 of 226

Kuwait: Capital Markets Authority Imposes Disciplinary Action

08/11/202408/11/2024
by Hannah Gutang

Mubasher, 3 November 2024: The Kuwaiti Capital Markets Authority has announced the issuance of Kuwait Ministerial Kuwait Capital Markets Authority Decision No. 29/2024 imposing a financial penalty against ASICO Industries Company and its board members, and Kuwait Finance Center Company.

According to the Authority’s statement, the number of board members is three members, a former board member, the former chairman of the company’s board of directors, Al-Bazai and Partners Office, and the company’s auditor; for violating the listing rules, market conduct, corporate governance, market ethics, securities activities, and registered persons.

The Authority has clarified that it was conclusively proven that the transactions carried out by ASICO Industries during 2018 and 2019, specifically the sale of a substantial stake in a (subsidiary) company, which resulted in profits of around 40 million Kuwaiti dinars, within the financial statements ending in 2018, were fictitious and not real.

It became clear that the purpose was to revalue the (subsidiary) company to improve and enhance the financial position of ASICO Industries.

Additionally, the transaction carried out by the company was essentially a financing transaction and not a sale transaction, as the final outcome of this transaction became clear during 2019 after ASICO Industries exercised the right to repurchase the sold stake without complying with the application of International Accounting Standards.

The three board members were proven to have violated Article 3-7(5) of Book Fifteen (Corporate Governance) of the Executive Bylaws of Kuwait Law No. 7/2010 and its amendments, for failing to fulfil their role in complying with International Accounting Standards following the transactions carried out by ASICO Industries during 2018 and 2019, specifically the sale of a substantial stake on 8 July 2018, of 30.23 million shares of its ownership in a (subsidiary) company to (the Buyer).

This resulted in profits of around 40 million Kuwaiti dinars within the financial statements ending in 2018, which was proven to be a fictitious and not a real transaction aimed at revaluing the (subsidiary) company to improve and enhance the financial position of ASICO Industries.

Additionally, the transaction carried out by the company was essentially a financing transaction and not a sale transaction, as the final outcome of this transaction became clear during 2019 after ASICO Industries exercised the right to repurchase the sold stake in the (subsidiary) company’s shares, without complying with the application of International Accounting Standards.

Regarding Kuwait Finance Center Company, it was proven to have violated Article 3-2(4) of Book Eight (Work Ethics) of the Executive Bylaws of Kuwait Law No. 7/2010 and its amendments, as the company arranged a transaction for its client ASICO Industries (the Seller), and the other party in that transaction was a subsidiary of Kuwait Finance Center Company.

It also violated Article 8-2(2) of Book Eight (Work Ethics) of the Executive Bylaws of Kuwait Law No. 7/2010 and its amendments.

As it was conclusively proven that Kuwait Finance Centre Company, in its capacity as an investment advisor to ASICO Industries, arranged the sale of a stake in a (subsidiary) company to (the Buyer), with one of the conditions for its execution being the opening of a portfolio with Kuwait Finance Centre Company and the collection of a management fee of 50,000 Kuwaiti dinars annually.

Obtaining a fee is considered obtaining a benefit by the licensed person from arranging the transaction through which profits and benefits are achieved other than the basic advisory fees.

Al-Bazai and Partners Office was found to have violated Article 3-4-5 of Book Five (Securities Activities and Registered Persons) of the Executive Bylaws of Kuwait Law No. 7/2010 and its amendments.

The violation occurred due to the firm’s failure, as the auditor of ASICO Industries, to report any observations in its review of the company’s financial statements for the years ending in 2018 and 2019.

Specifically, the auditor did not address the improper recording of the financial impact of a transaction in which a stake in a subsidiary was sold on July 8, 2018, to a buyer. Despite the sale, ASICO Industries continued to control the sold stake after the transaction was completed, given the company’s retained right to repurchase the stake as specified in Article Four of the contract dated July 8, 2018.

The decision included imposing a financial penalty on ASICO Industries of 50,000 Kuwaiti dinars for the first violation, and 5,000 Kuwaiti dinars for each of the four board members and the former chairman of the board for the violation attributed to them.

A financial penalty of 50,000 Kuwaiti dinars was imposed on Kuwait Finance Center Company for the first and second related violations, and Al-Bazai and Partners Office, as the auditor of ASICO Industries, was fined 20,000 Kuwaiti dinars for the violation attributed to it.

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Dubai: DFSA Fines Company for Unauthorised, Misleading Financial Promotions

08/11/202408/11/2024
by Hannah Gutang

The Dubai Financial Services Authority (DFSA) has published a Decision Notice against Vedas International Marketing Management (Vedas Marketing) for unauthorised and deceptive Financial Promotions related to the Multibank Group.

The DFSA has stated that it had imposed a financial penalty of US$100,000 (AED367,000) on Vedas Marketing for conducting unauthorised financial promotions about the Multibank Group to individuals located in the DIFC.

Also, for engaging in misleading and deceptive conduct by representing that certain entities in the Multibank Group were regulated by the DFSA, when in fact, none of the promoted entities were.

The Multibank Group offers trading platforms, and the DFSA has made no allegations of wrongdoing against the Multibank Group itself in the Decision Notice.

On 2 June 2024, Vedas Marketing challenged the conclusions in the DFSA’s Decision Notice by referring it to the Financial Markets Tribunal (FMT).

However, the FMT directed on 22 July 2024 that the reference should be struck out due to Vedas Marketing’s failure to pay the required filing fee for the referral.

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Bahrain: Proposal To Lower Business Dispute Threshold Set For Parliament Review

08/11/202408/11/2024
by Hannah Gutang

The Daily Tribune, 1 November 2024: Parliament is scheduled to discuss a bill that proposes lowering the minimum claim value managed by the Bahrain Chamber for Dispute Resolution (BCDR) from 500,000 to 100,000 dinars.

This adjustment would modify the Chamber’s monetary jurisdiction, potentially giving companies a faster way to settle commercial disputes.

Supporters of the bill believe this change could reduce court pressures and enhance Bahrain’s reputation as a business-friendly hub by offering businesses quicker and more accessible resolutions.

The proposal seeks to remove barriers that currently limit access to the Chamber, opening its services to a wider range of commercial claims.

By revising the jurisdictional threshold, the bill is intended to create a more accessible route for firms to resolve financial and business conflicts, thus adding another layer to Bahrain’s appeal as a place for investment.

The BCDR, however, has voiced reservations.

They argue that the bill’s goal of speeding up case resolutions may already be met through current procedures.

The BCDR operates on similar timelines to the courts, with both allowing for an initial two-month period to manage cases, which can be extended by two months as required.

The Chamber also stresses the need to balance its financial health against the costs of its services.

Fees generated from cases above 500,000 dinars form a critical part of its revenue.

Lowering the threshold could cut these earnings by 20 to 80 per cent per case, depending on the claim value, and reduce the funds available for maintaining services.

This income is essential for covering the costs of both mandatory and optional services, such as mediation and arbitration, and for allowing the Chamber to invest in future projects.

As more cases are likely to fall under the Chamber’s remit if the bill passes, the institution foresees a risk of overstretching its resources, which may strain its ability to sustain service quality at current levels.

Financial strain could hinder the BCDR’s ambitions to fund new initiatives and to preserve its standing on the regional and international stage.

Despite these concerns, the Legislative and Legal Affairs Committee has recommended the proposal, urging its approval in the upcoming session.

The committee sees this as a practical move towards making dispute resolution faster and easier for Bahrain’s business sector.

This proposal aligns with Bahrain’s ambition to refine its legal and economic systems in ways that encourage investment and development.

Should it pass, the bill will alter the process for managing economic disputes, aiming to reduce time in legal proceedings and improve judicial services within the Kingdom.

By expanding the Chamber’s jurisdiction to cover claims over 100,000 dinars, the legislation has the potential to make Bahrain an even more attractive location for businesses, while the Chamber faces the challenge of sustaining financial stability under the new arrangement.

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Abu Dhabi: Occupational Safety and Health Awareness

08/11/202408/11/2024
by Hannah Gutang

Al Etihad, 1 November 2024: The Municipality of Abu Dhabi City has stressed to consulting offices and high-risk contracting companies the importance of fully complying with occupational health and safety requirements at construction sites.

It has emphasised the need to meet all standards set by the Abu Dhabi Occupational Safety and Health System.

This came during the awareness workshop organised by the Environment, Health and Safety Department in the Municipal Council hall in the Abu Dhabi City Municipality building, which aimed to enhance the awareness and commitment of consulting offices and contracting companies to preventive measures that would create an ideal, positive, and healthy work environment free of accidents.

The workshop’s topics included explaining the requirements of the Abu Dhabi Occupational Safety and Health System, and the mechanism for monitoring the implementation of these requirements in terms of submitting periodic reports, activity reports, auditing, and others.

The workshop was keen to raise the level of knowledge of newly registered construction and contracting entities about the requirements of the Abu Dhabi Occupational Safety and Health System.

Through these awareness workshops, the Municipality of Abu Dhabi City emphasises the necessity of maintaining the safety of workers in the construction sector and preserving their general health, as it is a top priority, as this sector is one of the most sensitive activities compared to all other sectors and businesses.

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UAE: Regulator Sets Requirements for End-of-Service Gratuity Investment Funds

31/10/202431/10/2024
by Hannah Gutang

Mubasher, 28 October 2024: The UAE Securities and Commodities Authority (SCA) has established eight key requirements for companies licensed to manage end-of-service gratuity savings funds within the country.

These requirements are part of the optional alternative system for end-of-service benefits, known as the “savings scheme.”

Financial institutions that have obtained licenses from the SCA have highlighted that the most crucial requirements include determining the contribution rate, ensuring a safe investment of funds to address concerns about potential losses, and specifying the timing for receiving entitlements upon termination of employment.

The requirements also cover the possibility of employees increasing their contributions to maximise benefits, as well as the option to continue investing their entitled funds in the fund after termination of employment.

Additionally, the benefits for participating employees and employers who contribute to these funds have been outlined.

The SCA has granted the first-of-its-kind licences to “National Bonds Corporation” and “Daman Investments” to manage end-of-service gratuity savings funds within the UAE.

This move aims to facilitate the safe and reliable investment of employee gratuities, ensuring the protection of their rights and increasing the value of their entitlements while enhancing the UAE’s position as an attractive destination for work and investment in the region.

According to the National Bonds Corporation, the basic employer contribution rate for their capital-protected investment fund is 5.83% of the employee’s basic monthly salary for full-time employees with less than five years of service, and 8.33% for those with more than five years of service.

Employees can also voluntarily contribute a percentage of their salary or a fixed monthly amount, subject to a maximum of 25% of their annual salary.

Participating employees are entitled to receive all basic contributions made by their employer to the alternative end-of-service gratuity system, along with any accrued returns during the contribution period, within 14 days of termination of employment.

Beneficiaries have the option to continue investing their entitled funds in the fund, and employees can withdraw part or all of their voluntary contributions or investment returns at any time during their employment, subject to conditions set by the fund manager.

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Saudi Arabia: SAMA Seeks Public Input on Updated Debt Collection Rules for Individuals

31/10/202431/10/2024
by Hannah Gutang

Argaam, 27 October 2024: The Saudi Central Bank (SAMA) is seeking public feedback on the draft of Debt Collection Regulations and Procedures for Individual Customers through the public consultation platform “Istitlaa”.

SAMA has stated that this project seeks to enhance and standardise debt collection practices, ensuring clear communication and safeguarding the rights of all parties.

The project sets minimum standards for financing institutions to follow in debt collection, including initial contact with clients, instalment deductions, managing clients at risk of default, and handling existing defaults.

It also emphasises due diligence in collecting overdue debts and addresses debt relief provisions in cases of death or total disability.

Feedback and comments on the Debt Collection Regulations and Procedures for Individual Customers must be submitted within 15 days of this announcement to assess their relevance in finalising the draft.

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Qatar: Tightens Penalties for Crimes

31/10/202431/10/2024
by Hannah Gutang

Al Watan, 28 October 2024: According to the recent amendments to Qatar Law No. 11/2004, which were published in the Official Gazette, and the addition of new articles to the law.

Legal experts have confirmed that these changes came to criminalise acts that were not previously criminalised or punishable, as well as to criminalise some newly emerging acts committed through technological devices that have become widespread.

The amendments also aim to tighten penalties for some crimes, ensuring that Qatar Law No. 11/2004 keeps pace with reality and acts as a deterrent to crimes.

Legal experts have pointed out that the continuous development in Qatari society, the increase in population, and economic growth are among the factors that necessitated amendments to the provisions of Qatar Law No. 11/2004.

They have stressed that the amendments aim to combat crimes that are alien to society and tighten penalties for some crimes that have recently spread in society, such as publishing photos and documents on social media without the owner’s permission.

The experts have indicated that electronic development has led to a number of new crimes, all of which require articles in the Penal Code to be addressed and eliminated.

It was explained that while Qatar is characterised by security and safety, Qatar Law No. 11/2004 needs to undergo periodic amendments to suit the times.

They have pointed out that the amendments to the law came to combat phenomena that harm society and make criminal think twice before committing any crime.

Imprisonment for a term not exceeding two years, and a fine not exceeding fifty thousand riyals, or one of these two penalties, shall be imposed on anyone who intentionally assaults the physical integrity of another by any means, and the assault results in illness or incapacity for personal work for a period exceeding twenty days.

The penalty shall be imprisonment for a term not exceeding three years, and a fine not exceeding seventy-five thousand riyals, or one of these two penalties if the act was committed with premeditation or lying in wait, or by more than one person.

Imprisonment for a term not exceeding three years, and a fine not exceeding fifty thousand riyals, or one of these two penalties, shall be imposed on anyone who causes the death of a person by mistake if it was due to negligence, recklessness, lack of caution, or non-observance of laws or regulations.

In all cases, the offender shall be punished with imprisonment for a term not exceeding one year, and a fine not exceeding twenty thousand riyals or one of these two penalties, if the victim’s heir pardons or accepts the blood money.

The following texts have been added to Qatar Law No. 11/2004:

Imprisonment for a term not exceeding three years, and a fine not exceeding one hundred thousand riyals or one of these two penalties, shall be imposed on anyone who enters or exits the State illegally, and anyone who assists in any way in the acts of preparation, facilitation, or completion of the commission of this crime.

The penalty shall be doubled if the perpetrator is accused of a crime or has been sentenced or ordered to be arrested, banned from travelling or denied entry.

Imprisonment for three years shall be imposed on anyone who broadcasts, facilitates the broadcasting, or uses, even in private, a recording, document, or photos obtained through any of the acts specified in the preceding article, without the consent of the concerned party.

The penalty shall be imprisonment for a term not exceeding five years for anyone who threatens to disclose any matter obtained through any of the aforementioned acts, to compel a person to perform or refrain from an act.

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Oman: New E-Commerce Regulations Aim to Protect Consumer Rights

31/10/202431/10/2024
by Hannah Gutang

The Arabian Stories, 27 October 2024: The Ministry of Commerce, Industry, and Investment Promotion (MoCIIP) has issued amended regulations under Article 33 of Oman Sultani Decree No. 66/2014, setting specific requirements for entities entering into remote contracts.

These regulations apply to any provider, advertiser, or agent based in Oman or with a representative in the country.

According to the new rules, these entities must obtain approval from the concerned authority, display products accurately in electronic formats, specify the location, date, and method of delivery for items, and establish a clear exchange and return policy that aligns with legal provisions.

The e-commerce regulations have been introduced with the aim of regulating the sector while protecting consumer rights.

Key objectives include fostering the development of e-commerce in Oman while upholding consumer rights and creating a safe and transparent e-commerce environment.

Another goal is to grant the Consumer Protection Authority access to account holders and websites and implement measures to protect consumer rights and address complaints.

Additionally, there is a focus on developing a comprehensive database of e-commerce practitioners in Oman, including both individuals and companies.

The objectives also include promoting trust between consumers and local e-commerce stores and attracting quality investments to boost the sector’s growth.

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Kuwait: Income Tax on Multinational Companies on the Horizon

31/10/202431/10/2024
by Hannah Gutang

Emarat Al Youm, 26 October 2024: The Finance Ministry has accelerated steps to diversify sources of income by replenishing the state’s public finances with non-oil revenues.

The first of which is taxes on the income of local multinational companies, which are expected to be implemented next year after completing the executive formulas, as shown by the Ministry’s activities in external meetings or at the level of internal circulars addressed to companies within the country, a copy of which was obtained by “Al-Siyasa”.

On the international front, the Ministry has revealed that it had passed the first stage of the international assessment to which Kuwait was subjected for the Exchange of Tax Information on Request (EOIR) by the Peer Review Group (PRG), which it described as a “great achievement” to move to the second stage of the assessment.

Simultaneously, the Finance Ministry has issued an executive circular to companies operating in Kuwait regarding the mechanism of “destruction of fixed assets” for companies, considering that the text of Kuwait Decree No. 3/1955, as amended by Kuwait Law No. 2/2008 and its executive regulations, stipulates that capital gains resulting from the disposal of assets must be treated as ordinary commercial profits and subject to tax to prevent any future tax evasion operations.

The circular has included notifying the Ministry of any destruction of assets 30 days before their destruction and the presence of the Ministry’s inspectors during the destruction process, otherwise, it will not be counted, amid expectations that these companies, whether local or foreign, will be subject to the income tax umbrella within 24 months.

Expectations suggest that there will be 30 local multinational companies, while it is likely that the tax revenue from these companies, in addition to the companies listed on the Kuwait Stock Exchange with income exceeding 750 million euros, will be around 405 million dinars.

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Bahrain: Private Sector Employers Must Notify Authorities Before Suspending Workers

31/10/202431/10/2024
by Hannah Gutang

The Daily Tribune, 29 October 2024: Employers in Bahrain’s private sector could soon need to notify authorities before suspending workers, and dismissed employees might get twice as long to file compensation claims, as Parliament debates new rules today.

The government’s draft law, submitted to the Council of Representatives has proposed two main updates to Bahrain’s Labour Law, introducing added checks on employers’ actions and extending protections for workers.

One proposal would require employers to notify authorities before suspending workers for serious misconduct.

Currently, employers have some discretion to temporarily suspend a worker in cases of harm or serious offences, but this adjustment would mean they must inform relevant authorities first, limiting employers’ ability to act independently in such cases.

Another proposed change would extend the timeframe for workers to file a claim after losing their job, increasing it from 30 days to 60.

Supporters say this additional time could help workers prepare stronger cases, though the government cautions that delaying claims might make it harder to gather reliable evidence and could slow the resolution of disputes.

In its memo, the government expresses concerns that these changes may disrupt the balance between worker protection and workplace stability.

Officials argue that requiring employers to notify authorities of suspensions could make it harder to handle misconduct, which might unsettle the work environment.

They also warn that an extended claim period could affect evidence quality, as time may erode details and reduce clarity in witness accounts.

The government also questions the proposed three-month cap on investigations by the Public Prosecution, arguing that it may infringe on judicial independence by imposing a strict timeline on prosecutors.

While recognising Parliament’s aim to strengthen worker rights, the government suggests a balanced approach that keeps workplaces steady.

Today’s debate may bring about changes to Bahrain’s employment laws, with these proposals potentially influencing how workplace disputes are handled in the future.

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