DAMMAM, 12 August 2005 — Al-Kayan Petrochemicals Company “Kayan” has canceled the investments of one hundred Saudi investors holding shares totaling more than 1.5 million shares, the Al-Riyadh newspaper reported. Investors bought shares in the company nine months ago to become founding members of the company. The excuse was that the Money Market Authority determined a maximum of sixty shareholders.
At the same time, investors in the company received authenticated letters from Al-Kayan Company to tell them that all agreement and contracts are void and their names are taken off the list of founding shareholders. Their money, which exceeds SR75 million, will be refunded. They in turn petitioned the king to confirm their ownership of the stocks and recognize them as founding members.
The Ministry of Commerce and Industry approved the establishment of Al-Kayan Petrochemicals Company last June with capital of SR3.2 billion divided into 65 million shares. The value per share is SR50. The founding members paid 25 percent of the value. The company will invest in commercial, industrial and real estate projects, including petrochemical and oil production.
A number of investors told Al-Riyadh that the behavior of the company is inappropriate and the first negative decision in the Saudi stock market. They call on the higher authorities and to the Money Market Authority to move fast to minimize the damage to investors.
Musaeed Al-Khalefa, legal representative of Saudi businessman Saleh Al-Bassan 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 canceled his stocks after they had held the money for a long time. He questioned the reasons as to why they canceled the shareholding of investors.
Abdulrahman Sameel, investor, said that Al-Kayan Company contacted him to receive his money for 50,000 shares, which cost of 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 bought at the company. He said, “I sold some of my private properties to secure the cash to invest in this company. The company violated the agreement and prevented us from putting our money in other investments.” 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.
