RIYADH: A top Saudi retail investor denied yesterday that he engaged in insider trading but said he accepted a verdict earlier this week by the bourse’s watchdog which fined him for the alleged practice.
The Capital Market Authority (CMA) said it had fined Mohammed bin Ibrahim bin Mohammed Al-Issa SR100,000 ($26,667) after an appellate body affirmed a ruling that he conducted “insider trading in shares of Saudi Hotels Co. based on his membership of the company’s board”.
Al-Issa told Reuters he was not considering altering his stake in any of the firms in which he is a shareholder, including Saudi Hotels, Savola Group, Riyad Bank and Banque Saudi Fransi, Calyon’s Saudi affiliate. “What they (CMA) used as a basis for the (verdict) was that I had information about a merger of Saudi Hotels and that I’m a member of the board: That is not true,” he said in a telephone interview.
“They (CMA) asked the company (Saudi Hotels) and they (company) said I was not aware of this. CMA decided the verdict and I accepted. I rest the matter with God,” he said.
Issa was ordered to pay the watchdog the $3.37 million profit that the CMA said he had made from trading in Saudi Hotels’ shares.
The CMA also banned Al-Issa from working for any listed company for three years.
Al-Issa holds a 22.4 percent stake in Saudi Hotels, 11.9 percent in the Savola conglomerate, a 10 percent stake in Riyad Bank and 5 percent in Banque Saudi Fransi.
In addition to a 16.6 percent stake in Taiba Holding Co., 85-year-old Al-Issa’s share holdings are worth some $7.11 billion based on the previous session’s close.
With billionaires such as Prince Alwaleed bin Talal and Sulaiman Al-Rajhi, Al-Issa is believed to be among the top five retail investors in the Arab world’s largest bourse.
Al-Issa said he does not plan to exit any of these firms or to reduce his stakes in any of them.
“The Saudi (stock) market is promising and whoever has got money should invest in the Saudi market especially in the current circumstances.
“Why would my investment be affected (by CMA’s decision)? They don’t have anything to do with this.
“If the need (to sell) arises, God forbid, I sell, if the need does not arise then my shares are available in good banks and in good firms. I don’t have any reason to exit them.”
Like others in the Gulf region, Saudi Arabia’s stock exchange has been dogged by allegations of insider trading and manipulation of stock prices, and CMA has slapped hefty fines on many investors and executives found guilty of manipulation. Analysts say CMA needs to make adherence to corporate governance regulations compulsory for listed firms instead of voluntary in order to achieve greater progress in boosting transparency in the Arab world’s largest stock market.
Meanwhile, banking stocks led the Saudi bourse to a lower close yesterday.
The Tadawul All-Share index ended 0.14 percent lower at 5,601.19 points.
Losses came in only from 5 sectors ranging from 0.03 percent by Telecommunication & Information Technology to 1.06 percent by Banks & Financial Services, while rest of the sectors managed to close with gains ranging from 0.13 percent by Retail to 2.89 percent by Insurance.
The liquidity however remained weak with only SR4.50 billion.
The advance-decline ratio was recorded at 1.56 with 70 advancers and 45 decliners, the Jeddah-based Financial Transaction House (FTH) said yesterday in its daily market commentary.
