DAMMAM, 3 June 2007 — The court of Grievances in Riyadh is currently examining a complaint of the Bishah Agricultural Development Co. (Badco) against the Ministry of Commerce and Industry on “damaging” press statements.
The company’s attorney urged that the ministry to withdraw the damaging statements.
Abdul Aziz Al-Houshani, Badco’s attorney, told Arab News that he drew the attention of the court to the fact the ministry violated Article 110 of the Saudi Company Regulations by interpreting the article in a manner that did not agree with the spirit of the article when the ministry demanded his company to treat alike the shareholders who paid the price of their shares in full and who did not pay the price in full. This is a clear violation of the company regulations, he claimed.
It is logical that the ownership of a share requires that the shareholder should pay the price in full, he noted.
Houshani explained that the correct interpretation of Article 110, in the light of Article 148 of the same regulations, is that a company is not required to call an extraordinary meeting of the general body if its losses did not reach 75 percent of its total capital. Further, the ministry has ignored the fact that the company made profits and the ministry’s statement has damaged the good reputation of the company, the attorney said.
The ministry laid down three conditions for the rectification of Badco’s legal status so that it can either guarantee its sustainability or enable its liquidation, the attorney said.
The conditions include the alterations in the financial position of the company in line with recommendations of legal experts and auditors, holding an extraordinary general body meeting to decide whether the company should continue to exist or be dissolved and liquidated.
The third condition laid down by the ministry was to call an ordinary general body meeting to discuss the demand of the shareholders to dismiss the current board of directors and nominate a new one on the basis of the shareholders’ choice.