RIYADH: The Shoura Council discussed a report by the Security Affairs Committee dealing with coastal security in the Red Sea, the Arabian Gulf and the Gulf of Aqaba. Members of the committee declined comment on the report’s contents.
The council also continued discussions of the new system presented by the Economic and Energy Committee for establishing companies in the Kingdom. The 226-article system will replace the old one issued about 45 five years ago.
Shoura Council Secretary-General Mohammed Abdullah said that the new system aimed at issuing a complete system for companies that set legislations for establishment, course of operations and closure.
The new system was felt to be necessary because of the current boom in development the country is witnessing, he added. The system includes the approval of long-distance voting for company board members.
Members disapproved of a number of articles read out by the vice president of the committee on Monday.
“Article 54 states that the minimum required capital in joint venture companies is SR500,000 while it was SR10 million according to the old legislation. This will create problems regarding closures in the future if approved,” said Council Member Ehsan Abdul Jawad.
Council member Abdulrahman Al-Enad asked what was the wisdom behind the decrease in required capital. Council member Saud Al-Shamari said establishing joint venture companies by one person was a positive thing but said that the local and investment atmosphere needed to be improved to do so.
Commenting on an article that defined a period of one hour to hold the second general assembly meeting after the first meeting is canceled due to lack of quorum.
Council member Abdullah Abdul Qader said that it was not acceptable and that it would create a number of problems between companies and investors. Some board members live in different cities and so the time should be changed to 24 hours instead of one.
Commenting on an article on bonuses for board members that entitles them to up to 10 percent of revenue, Abdullah Abdul Qader said it was a very large percentage and would create problems in the future, He felt that a percentage should not be set but should be left to each individual company.
