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Mon 9 Mar 2015 11:25 AM

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Board members of Saudi contractor MMG referred to kingdom's investigations body

Financially-troubled over-extending itself during the boom years, has not traded on the Saudi bourse since July 2012, when its shares were suspended by the regulator

Board members of Saudi contractor MMG referred to kingdom's investigations body
Image for illustrative purposes only.

Financially-troubled Saudi Arabian contractor Mohammed Al Mojil Group (MMG) has had a number of board members referred to the kingdom's Bureau of Investigation and Public Prosecution, a statement from the Ministry of Commerce said on Sunday.

The firm, which got into difficulty after over-extending itself trying to take advantage of a boom in construction in the kingdom, has not traded on the Saudi bourse since July 2012, when its shares were suspended by the regulator after breaching rules relating to accumulated losses.

The Ministry of Commerce said on Sunday it took "action after letters addressed to board members enquiring over violations in the companies law were unanswered", referring to actions which led to the drop in the share price and, ultimately, its suspension.

"It comes as part of a plan introduced by the ministry to tighten oversight on violating companies and taking the necessary procedures to protect shareholder capital," the statement added.

The statement did not name, or give the precise number of, the board members referred to the body.

The company's woes have had consequences beyond the firm and its shareholders, with Saudi's market regulator suspending the local unit of accountancy firm Deloitte & Touche from doing auditing work for listed firms in the kingdom from June 1, 2015 as its role in MMG's fall was investigated.

The contractor said in October that its board had approved a recovery plan that use most of its existing capital base to pay off debts and new cash raised through a share issue.

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