Saudi Arabia’s Mobily has
removed chief executive Khalid Al Kaf, who had been suspended since November
pending an investigation into accounting practices at the telecommunications
operator, it said on Wednesday.
Mobily, formally called Etihad Etisalat, announced
Kaf’s suspension on November 23. Earlier that month, the company slashed its
profits for 2013 and the first half of 2014 by a combined SAR1.43 billion
($381 million) because of what it said were accounting errors.
The earnings restatement prompted the bourse
regulator, the Capital Market Authority, to launch an investigation into
Mobily, while the company itself began its own probe as it suspended Kaf.
Mobily put his deputy Serkan Okandan in charge on
an acting basis. Okandan is also chief financial officer of Abu Dhabi-listed
Etisalat, which owns 27.5 percent of Mobily. He has a mandate to remain at the
helm until at least the end of March.
Saudi Arabia’s second biggest mobile operator said
Kaf, who had worked for Etisalat for 19 years before becoming Mobily’s CEO in
2005, had offered to resign on February 21. The statement did not say whether
Mobily had accepted Kaf’s resignation, merely that it discharged him from his
position on February 24.
Mobily said in a separate statement that it would
not pay a dividend for the fourth quarter of 2014, for which it reported a loss
of SAR2.28 billion.
This is the second successive quarter for which it
will not pay a dividend, and analysts are now gloomy about the size of future
payouts by the company, which was long considered a top pick among retail and
institutional investors.
HSBC has in recent days slashed its price target
for Mobily shares to SAR38 from SAR60, with a neutral rating. The stock
is now at SAR35.30, down 64 percent from last May’s eight-year high, wiping
off about $13 billion from its market value.
The firm on Tuesday announced its chairman
Abdulaziz Al Saghyir had resigned with immediate effect, citing health reasons.
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