Title: Announcement regarding issuance of Disciplinary Board Resolution No. (38/2024 Disciplinary Board) (18 /2024 Authority) and imposition of a fine and a warning against:1- Kuwait Foundry Company 2- CEO of the Company for violating the rules of Disclosure and Transparency and Corporate Governance

Announcement regarding issuance of Disciplinary Board Resolution No. (38/2024 Disciplinary Board) (18 /2024 Authority) and imposition of a fine and a warning against:1- Kuwait Foundry Company 2- CEO of the Company for violating the rules of Disclosure and Transparency and Corporate Governance

For the following reasons:
First: Kuwait Foundry Company violated the following:

1. The provision of Item (1) of Article (3-5-1) of Module Ten (Disclosure and Transparency) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, the Company failed to disclose the lawyer and legal consultancy office in the list of insiders.
2. The provision of Article (4-7-2) the same Module, it was proven to the CMA that the Company disclosed a few material information on its website before publishing the disclosures in the Securities Exchange’s website.
3. The provision of Item (3) of Article (6-3) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, it was proven to the CMA that the Company's risk management is not independent, as the Company has assigned risk management tasks to an employee in administrative affairs who reports to the Company's of Administrative Affairs Manager and not to the Risk Committee, in addition to the CEO evaluating the performance of the aforementioned man for the years 2021 and 2022 and not the Risk Committee, which leads to the absence of independence from the Risk Department.
4. The provision of Article (6-7) of the aforementioned Module, it was proven to the CMA  that the internal audit department is not independent, as the Company has assigned the tasks of the internal audit department to the head of the accounting department who reports to the Company's financial manager and not to the audit committee, in addition to the CEO evaluating the performance of the aforementioned man for the years 2021 and 2022 and not to the audit committee, which leads to the absence of independence from the internal audit department.

Second: CEO of Kuwait Foundry Company, for violating the provision of Item (7) of Article (3-10) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, it was proven to the CMA that he did not activate effective control tools to preserve the Company’s funds, assets and shareholders’ rights, due to the Company receiving an uncertified check from one of the parties to whom the Company’s usufruct right for its industrial land was waivered, despite the fact that the contract signed on 21/12/2021 stipulates that “..... a first payment to be paid by the second party to the first party (the Company subject of the inspection) in the amount of KWD (2,550,000) shall be collected by means of a certified bank check upon signing this contract...”, but the Company received the uncertified check, which resulted in the failure to collect the aforementioned check due to insufficient balance in the account, as well as the resulting legal and financial complications and risks.

The Resolution included the infliction of the following penalty: -

“First: The penalty on Kuwait Foundry Company shall be as follows:

1. Levying a fine against Kuwait Foundry Company in the amount of KWD 1,000 (one thousand Dinars) for the first attributed violation.
2.  Levying a warning for the second violation for the attributed violation with consideration that it does not repeat it in the future.
3. Levying a fine in the amount of 2,000 (two thousand Dinars) for the third and fourth violations due to correlation.

Second: Levying a warning on the CEO of Kuwait Foundry Company for the attributed violation with consideration that it does not repeat it in the future.”

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.