CMA prepares program to accomplish Saudi Vision 2030

CMA prepares program to accomplish Saudi Vision 2030
Mohammed Abdullah Aljadaan
Updated 02 October 2016

CMA prepares program to accomplish Saudi Vision 2030

CMA prepares program to accomplish Saudi Vision 2030

RIYADH: In order to execute the instructions of the Council of Economic and Development Affairs, the Capital Market Authority (CMA) has started to prepare a program to accomplish the Vision 2030 of the Kingdom of Saudi Arabia based on its (2015-2019) strategic plan.
This comes as part of CMA's belief in its role in the national economy and the part it plays to develop the capital market to be one of the important contributors to the investment power in the (Saudi Vision 2030).
Mohammed Abdullah Aljadaan, chairman of the Capital Market Authority, explained that the Council of Economic and Development Affairs instructed CMA to prepare and build a separate program to achieve the Vision 2030 plan, which would emphasize the importance of the capital market in contributing to the growth of the national economy and becoming a major investment power, in addition to the responsibility to all related legislative and follow-up entities in the upcoming period.
CMA's program to achieve Vision 2030 will aim to attract national and foreign investment to the Saudi Capital Market so it would be an integral part in developing the economy and diversifying its sources.
The program will be consistent with CMA's strategic plan established in 2015. The plan's initiatives accounts for a large portion of the components of the program, in order to achieve a number of objectives as stated in Vision 2030.
The objectives of the program include supporting the diversification of investment products, promoting and facilitating investing to all segments of investors, strengthening the role of the Saudi capital market in providing the necessary funding for projects, in addition to developing infrastructure and financial stability as well as raising the level of transparency and governance.

CMA meets with loss-making companies

The Capital Market Authority met with the members of the board of directors of joint stock listed companies as well as the executive management in the companies whose accumulated losses reached or exceeded half of its paid capital.
The meetings' discussed Article 150 of the new Companies Law related to the procedures that must be followed when a company's accumulated losses reaches 50 percent or more of its paid capital. It was also mentioned that the amending period ends on April 22, 2017.

The procedures of Article 150 of the new Companies Law included the following procedures for the companies with accumulated losses up to 50 percent or more of its paid capital: Any auditor or company official should inform the chairman of the board of directors once he knows that the company's accumulated losses reached 50 percent or more of its capital; the chairman should inform the board immediately; within 15 days of knowing, the board should call for a meeting with the extraordinary general assembly within 45 days.
The extraordinary general assembly should decide to either increase or decrease the company's capital — according to the Companies Law and other related rules and regulations — to a degree where the percentage of losses would decrease below than 50 percent of the capital or dissolute the company before the deadline in its law.
As per the new Companies Law, the company is terminated by law in any of these cases: If the extraordinary general assembly do not meet during the specified period above, if a meeting was held but was unable to pass a resolution, and if it was decided to increase the capital as stated above but no one subscribed in the capital increase within 90 days from the issuance of the resolution to increase the capital.
As it was previously announced, CMA is working on amending the instructions and procedures related to listed companies with accumulated losses up to 50 percent of its capital or more to go in line with the new Companies Law.
The amended instructions and procedures will be announced once approved by the CMA board. The authority emphasized that it will take into account the rights of shareholders and investors in these companies, which would be reflected in the transparency and disclosure of the Capital Market and increase the efficiency and fairness of trading in the shares of listed companies.