Kuwait’s market regulator has suspended trading in shares of Gulf Finance House (GFH) over the non-disclosure of the intended sale of Leeds United Football Club last year.
The Bahrain-based institution was negotiating to sell the club but claims it was not obliged to disclose the discussions because they had not been completed.
In a statement issued on Thursday, GFH denied it acted inappropriately and said it would appeal the three-day suspension.
“GFH [sic] position was that the transaction which CMA is referring to was actually not completed and was subject to English Football League approval along with ‘confidentiality and non-disclosure obligations’ (as per the Terms & Conditions of the agreement) till the completion of the transaction,” the statement says.
“Therefore, GFH’s intention was to first achieve completion of the transaction to disclose the information and prevent speculation in GFH’s shares.
“It must be noted that the transaction on the subject matter was not completed; however, GFH has entered into another sale agreement with Italian Investors which was successfully completed on 10th April 2014 for which the announcement was made by GFH on the 14th April 2014.”
The suspension follows the Capital Market Authority’s decision to monitor GFH shares after the stock was traded in high volumes ahead of a company disclosure on May 30, 2013, that Bahrain's Khaleeji Commercial Bank, an associate of GFH, had signed an agreement with Bank Al Khair to study a possible merger.
At the time, GFH said there was no relation between the memorandum of understanding and high trading volumes witnessed on May 19-21.
The merger plans were scrapped in March this year after the two Islamic banks failed to agree on the structure and valuation of the deal.
However, the CMA rejected an appeal against the monitoring.
GFH’s subsidiary GFH Capital also is in a legal dispute with the former chief of the Leeds United club, David Haigh, who it accuses of embezzlement and abusing his position.
Haigh has been held in a Dubai jail for more than four months without charge and has launched a deceit case against his former employers in a London court.
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