JEDDAH, 27 August — The regional chairman of a Bahrain-based accountancy company has allegedly run away with shareholders’ money after changing the firm’s legal status without consulting his partners.
The scandal broke after a Saudi firm presented an application to the Commerce Ministry to merge with the Bahraini company. Informed sources said the ministry was unlikely to endorse the merger.
According to information received by Arab News, the chairman had transferred all company shares to his personal account with the help of another partner. He also changed the status of the Bahraini firm from a joint-liability company to limited liability company.
The sources estimated the value of shares embezzled by the chairman at $18.75 million, including SR5 million ($1.4 million) invested in the company’s offices in Saudi Arabia.
The Saudi partners said the chairman and another partner embezzled the company’s shares, resorting to legal channels. They also accused that the chairman had run away without paying the dues to Zakat Department, estimated at 2.5 percent of the company’s turnover, as well as income taxes worth 30 percent of profits.
Chartered accountants, who were partners in the company’s Saudi branch, said they will file a lawsuit against the chairman demanding compensation and cancellation of his license in Bahrain and Saudi Arabia and his shares in Middle East branches.
The sources said the Saudi company, which intended to merge with the Bahraini firm, had forced its Saudi employees to resign, citing merger as an excuse.
The Saudi accountants, who were likely to lose their jobs, told Arab News that the company did not guarantee them any jobs in the new company after merger. They accused the company linked the payment of their dues to resignation. There are 20 Saudis in the company which employs about 220 people.
