By Asseel bin Talib

Riyadh-Mubasher: Saudi Arabia’s Capital Market Authority (CMA) has imposed a penalty of SAR 40,000 on Saudi Cable for not revealing the reasons behind an increase in losses for 2013.

The authority cited the company’s financial statements for the period ended 31 December 2013, which it said were not clear in terms of explaining the losses.

The company’s accumulated losses have reached 44% of capital, and the company has been trying to roll over its debts for two years.

The Tadawul-listed firm earlier signed an agreement with three local banks to raise SAR 640 million in credit facilities.

Shareholders should take action against sucha management that exploits the company’s savings, lawyer Badr Al-Roqi told Mubasher. He added that the problem can be solved through reducing capital to offset the losses, followed by increasing capital so that  the liquidity can be used in repaying the debts.

Al-Roqi called for a transparent plan to avoid losses, noting that costs should also be reduced and that the management should be reshuffled.

“It seems that the market regulator took into account the company’s position and mismanagement when it decided to exclude the stock from the benchmark. This indicates that there are more violations which need more time and efforts to be resolved,” the lawyer said.  

Translated by Abdul Maguid Aboshahla