«السوق المالية» تُعوّض المتضررين من المخالفات المرتكبة على سهم شركة «حديد وطني»

The Capital Market Authority announced that it has completed compensating those affected by the violations committed on the shares of National Steel Company (Hadeed Watani), which occurred before and after the direct listing of the company's shares in the parallel market (Nomu), and the resulting violations committed by five convicted individuals, against whom the Appeals Committee's decision in securities disputes was published on the Authority's and the General Secretariat of the Committees for the Settlement of Securities Disputes' websites on April 4, 2024, following the lawsuit filed by the Public Prosecution and referred to it by the Capital Market Authority, which mandated them to pay (41.4) million riyals for the illegal gains obtained as a result of these violations.

The Authority clarified in a statement issued (today) that it has deposited the compensations into the accounts of the affected individuals through the compensation fund established by a decision of the Authority's Board to compensate those affected according to the distribution plan approved by the Committee for the Settlement of Securities Disputes, which contributes to facilitating the compensation procedures and delivering rights to their owners with minimal effort.

Since the date of the publication of the Appeals Committee's decision, the Authority has worked on assessing the appropriateness of activating Article (59) of the Capital Market Law, which grants the Authority the authority to organize the procedures for compensating individuals affected by the committed violations and to establish dedicated compensation funds sourced from the illegal gains collected, with compensation for affected individuals carried out according to a distribution plan approved by a decision from the committee. This resulted in the establishment of this fund to compensate the entitled individuals according to a distribution plan that was approved by a decision from the Committee for the Settlement of Securities Disputes, in accordance with the necessary rules and procedures and the regulatory requirements to enhance the efficiency of these funds.

The Authority confirmed that the approved distribution plan was designed to align with the scale of the violations committed and the value of the illegal gains achieved as a result of those violations, as well as the extent of the damage incurred by investors who traded the company's shares during the violation period, with the value of compensations for some investors reaching over one million riyals as the highest compensation amount approved by the Committee for the Settlement of Securities Disputes.

The Authority emphasized that the distribution plan adopted by the settlement committees included all those who were proven to have suffered material damage, based on what was shown in the technical records, and this does not prejudice the right of anyone who believes they have suffered damage and was not included in the distribution plan to submit their individual claim to the committees for the settlement of securities disputes to demand that.

It stated that compensation funds are complementary to the mechanisms facilitating the compensation of those affected by the violations committed in the financial market, in addition to the available mechanisms for compensating damages, such as individual and collective lawsuits. The Authority adopts a number of criteria through which it determines the appropriateness of establishing a compensation fund from the illegal gains collected from violators whenever the facts and circumstances of the case demonstrate that there are actual victims of these violations. The Authority believes that establishing a compensation fund will be more effective and productive in practical terms than other means of compensating for the damages suffered by market participants due to the actions and behaviors committed by violators of the Capital Market Law and its executive regulations.

The Authority indicated that it adopts a set of analytical tools to reach a systematic assessment regarding the appropriateness of establishing a fund to compensate those affected by the illegal gains collected under final decisions issued by the committees for the settlement of securities disputes. This is based on a number of criteria that contribute to determining the most suitable compensation mechanism, whether through direct compensation via these funds or through collective lawsuits for compensation claims. These criteria include aspects related to the execution and collection processes for those gains, the nature of the committed violations, their multiplicity, and their impact, in addition to the extent to which the settlement committees can adopt the principle of compensation and its practical application to all affected individuals in the case under evaluation.

The Authority confirmed its commitment to studying the best global practices applied in financial markets, adopting what is suitable for the nature of the Saudi financial market, which contributes to enhancing the efficiency of compensation mechanisms and boosting investors' confidence in the market and protecting their rights. It noted that these efforts are part of a package of strategic initiatives it has launched to complete the building of a more advanced and competitive financial system.