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SR1.5m shares of Saudi investors cancelled

JEDDAH — A petrochemicals company has cancelled the investments of 100 Saudi investors holding shares totalling more than SR1.5 million, according to a report in the Arabic daily Al-Riyadh.

Investors bought shares in the company Al-Kayan Petrochemicals Company nine months ago to become founding members of the company, the daily reported on Thursday. The excuse put forward was that the Money Market Authority had determined a maximum of 60 shareholders.

The deputy manager of the company Tariq Al-Abdulhadi refused to comment on the company's decision to cancel the stocks of the investors saying that he had nothing to say.

Investors in the company received authenticated letters from Al-Kayan Company to tell them that all agreements and contracts were void and their names were taken off the list of founding shareholders. Their money, which exceeds SR75 million, would be refunded. They in turn petitioned the king to confirm their ownership of the stocks and recognise them as founding members.

A number of investors told Al-Riyadh that the behaviour of the company was inappropriate and the first negative decision in the Saudi stock market. They called on the higher authorities and the Money Market Authority to move fast to minimise the damage to investors.

Musaeed Al-Khalefa, legal representative of Saudi businessman Saleh Al-Bassam who is an investor in the company, said that his client purchased one million stocks in the company nine months ago paying SR50 million.

He said that his client was very surprised that the company cancelled his stocks after they had held the money for a long time. He questioned the reasons as to why they cancelled the shareholding of investors.

Abdulrahman Sameel, investor, said that Al-Kayan Company contacted him to receive his money for 50,000 shares, which cost more than SR2 million.

Fares Al-Dossary, another investor, said that the company contacted him also to receive his money for the 30,000 shares he had bought.

He said he had sold some of his properties to secure the cash to invest in the company. He added that the company violated the agreement and prevented him from putting his money in other projects.

The ministry of commerce and industry approved the establishment of Al-Kayan Petrochemicals Company last June with a capital of SR3.2 billion divided into 65 million shares. The value per share is SR50. The founding members paid 25 per cent of the value. The company would invest in commercial, industrial and real estate projects, including petrochemical and oil production.