Title: Announcement regarding issuance of Disciplinary Board Resolution No. (01/2024 Disciplinary Board) (148/2023 Authority) and imposition of a fine against: Abdul Rahman Mubarak Hassan Al-Qaoud in his capacity as Gulf Petroleum Investment Company’s External Auditor for violating the rules of Securities Activities and Registered Persons

Announcement regarding issuance of Disciplinary Board Resolution No. (01/2024 Disciplinary Board) (148/2023 Authority) and imposition of a fine against: Abdul Rahman Mubarak Hassan Al-Qaoud, in his capacity as Gulf Petroleum Investment Company’s External Auditor for violating the rules of Securities Activities and Registered Persons

For the following reasons:
Violating the provision of Article (3-4-5) of Module Five (Securities Activities and Registered Persons) of the Executive Bylaws of Law No. 7 of 2010 and their amendments by failing to adhere to the following:

a. Failing to review the valuation reports prepared by the Company,  ensuring the alignment of the of the valuation reports with the requirements of the International Financial Reporting Standard (IFRS 13) when including the assessed value of those assets in its financial statements.

b. Failing to perform the necessary verification procedures to form an opinion on the Company's share in the joint venture included in its financial statements, ensuring its compliance with the requirements of International Accounting Standard (IAS 28) (Investments in Associates and Joint Ventures), and failing to carry out the necessary verification procedures to form an opinion on the revenue related to the exploitation rights activities in the amount of KWD 960,046 (nine hundred and sixty thousand and forty-six Kuwaiti Dinars), during the audit of the Company's financial statements for the year ending 31/12/2022 and the review of the Company's financial statements for the periodical periods ending 31/3/2023 and 30/6/2023, as no observations or qualified opinions were raised regarding this balance in the report prepared on those financial statements.

c. Failing to verify the Company's application of the requirements of International Financial Reporting Standard No. (IFRS 9) (Financial Instruments) on the item (Amounts Due from Related Parties) when auditing the Company's financial statements for the year ending 31/12/2022 and the periodical period ending 31/3/2023, despite the following:

1. The presence of other  net amounts due of KWD 621,628 (six hundred and twenty-one thousand six hundred and twenty-eight Kuwaiti Dinars) related to long-standing subsidiary companies (the majority for over 3 years) with no indications of repayment by these subsidiaries for  the outstanding amounts.

2. The total amount of KWD 1,292,532 (One million, two hundred and ninety-two thousand, five hundred and thirty-two Kuwaiti Dinars) for receivables from related parties (before repayment of a significant portion of these amounts during the month of October 2023) that have been in existence for a long time (the largest portion for more than 3 years) and there are no indications of timely repayment.

d. Not including  an explanatory paragraph or confirmation regarding the Company’s ability to continue operations in the Company’s financial statements for the periods ending on 31/12/2022, 30/6/2023 and 31/3/2023, where the deteriorating liquidity and financial solvency rates of the Company were not considered, as well as the quality of its assets, specifically with regard to the excess of the Company’s total current liabilities, valued at KWD 12,703,603 (twelve million, seven hundred and three thousand, six hundred and three Kuwaiti Dinars) over the Company’s total current assets balance, valued at KWD 8,339,528 (eight million, three hundred and thirty-nine thousand, five hundred and twenty-eight Kuwaiti Dinars), which does not comply with the requirements of paragraphs (25) and (26) of International Accounting Standard No. (1) and the requirements of Revision Standard No. (570).

The Resolution included the infliction of the following penalty: -

“Levying a fine against Abdul Rahman Mubarak Hassan Al-Qaoud in his capacity as Gulf Petroleum Investment Company’s External Auditor in the amount of KWD 3000 (three thousand Dinars) for the attributed violation in all its items”. 

In this regard, the CMA emphasizes the implementation of CMA Law and its Executive Bylaws on all persons dealing in securities activities, and urges them to comply with these rules in order to promote investors' confidence, create a sound investment environment, and implement the Law according to the principles of fairness, transparency, and integrity in line with the best international practice.