RIYADH, 27 December 2002 — Saudi Arabian Monetary Agency has granted a four-week grace period ending on Jan. 20 for the newly banned investment companies to submit their audit reports to the central bank as a preparatory move toward the merger of these institutions to form a commercial bank.
An informed source said that SAMA has notified the banned financial companies of the new grace period. SAMA had in the past given the companies a grace period that ended last July. The companies, which failed to make use of the opportunity, explained that they could not keep the deadline set by the central bank because the auditors and real estate evaluators, who were entrusted to prepare the audit reports did not complete their task on time.
In an earlier statement, Mohammed Al-Jasser, deputy governor of SAMA, said that SAMA was trying for a comprehensive and just evaluation of the financial companies. SAMA will first study the reports prepared by the auditors. The merger will become effective only after an independent committee studied the SAMA report on the matter.
SAMA will also determine the size of the proposed company’s capital, shares and name.
It was a ministerial committee set up to study the operations of financial companies that recommended the merger by founding a joint stock banking company as well as stopping other unlicensed operations.
Al-Jazirah adds: A top official of one of the 25 banned financial companies announced his plan to hold shortly a press meeting to explain his company’s operations and to reassure its clients. A source close to Juma Fahd Al-Juma, director general of Al-Juma Group, said Juma welcomed the ministry’s moves to regulate the financial market in the Kingdom and stressed the need to take firm legal measures to end the chaotic state in the market.
The source also said the investors in the group have no reason to worry, as their money has been invested in safe industrial and commercial operations spread in Sudan, Bahrain and the United Arab Emirates apart from the Kingdom. The group also owns the Sudanese Real-Estate Bank, 45 percent of the equities in the Islamic Cooperative Bank, a Sudanese gas company and the Free Markets Company in Sudan.
The source assured the investors that the group is capable of paying exorbitant dividends to the investors because of the highly profitable investment climate in Sudan, which is on the road to an economic boom.
