Disciplinary Board Fines Companies and Individuals for Multiple Violations

The Disciplinary Board of the Capital Markets Authority issued financial penalties against several companies. It imposed a fine of 50,000 Kuwaiti Dinars on Al Arabiya Investment Company for violating rules regarding client funds and assets.

The Authority stated that the reasons for the penalty included violating Article (2-3) of Book Seven (Client Funds and Assets) of the Executive Regulations of Law No. 7 of 2010 and its amendments. The Authority found, upon reviewing certain investment portfolios pledged in favor of a bank, that the company failed to segregate client assets and funds by registering property ownership documents included in the contents of the portfolios pledged to the bank under the company’s name.

It further clarified that the company also registered allocation contracts for plots in service, craft, and commercial zones (usufruct rights) issued by the Public Authority of Industry in its name, and subsequently included them in the contents of the portfolios pledged to the bank.

On another note, a financial penalty was imposed on Dalkan Real Estate Company for violating listing, disclosure, and transparency rules, with a fine of 5,000 Kuwaiti Dinars for each of the two violations attributed to it.

The penalty stemmed from the company’s violation of:

First: The provision of Clause (2) of Article (1-16-1) of Book Twelve (Listing Rules) of the Executive Regulations of Law No. 7 of 2010 and its amendments. The Authority found that the company failed to submit a copy of its annual financial data for the fiscal year ending on 31/12/2025 through the Authority’s electronic disclosure system (XBRL), as well as failing to disclose it on the stock exchange within the legally specified times, in accordance with the requirements of Clause (2) of Article (1-16-1) mentioned above. It is noted that the specified deadline ended on 31/3/2026.

Second:

a) The provision of Article (4-6-3) of Book Ten (Disclosure and Transparency) of the Executive Regulations of Law No. 7 of 2010 and its amendments.

b) The provision of Article (4-6-5) of Book Ten (Disclosure and Transparency) of the Executive Regulations of Law No. 7 of 2010 and its amendments.

The Authority found that the company failed to accurately disclose on the Kuwait Stock Exchange material information regarding the resignation of the company’s external auditor, as stated in his letter dated 1/4/2026, concerning the completion of the audit of the company’s financial data for the fiscal year ending on 31/12/2025.

The Disciplinary Board also issued a decision to impose a financial penalty on NCM Investment Company for violating the rules of the Capital Adequacy Instructions for Licensed Persons, with a fine of 5,000 Kuwaiti Dinars for each of the two violations attributed to it.

The Authority found that:

First: NCM Investment Company failed to submit its capital adequacy report for the fiscal year ending on 31/3/2026 within the legal period, which ended on 17/5/2026.

Third: The provision of Article (139) of Law No. 7 of 2010 and its amendments, where the Authority found that NCM Investment Company failed to submit its interim financial data to the Authority for the fiscal year ending on 31/3/2026 within the legal period, which ended on 17/5/2026.

The Board issued a decision to impose a financial penalty on Ahmed Rajab Khudair Saleh for violating market conduct rules, with a fine of 50,000 Kuwaiti Dinars for the violation attributed to him, and ordered him to pay 15,938 Kuwaiti Dinars, representing double the value of the benefit he gained as a result of committing the violation.

He violated the provisions of paragraph (c) of Article 1, Article 2, and paragraphs (a) and (b) of Article 7 of Chapter 14 (Market Conduct) of the Executive Regulations of Law No. 7 of 2010 and its amendments. The Authority established, through monitoring and reviewing trading activities involving the company’s shares during the trading session held on February 8, 2026, at the Kuwait Stock Exchange, that Ahmad Rajab Khudayr Saleh, via his electronic trading account, influenced the company’s order book by employing an improper approach. This involved placing multiple buy orders in relatively large quantities and at prices below the prevailing market price, followed by executing relatively large buy orders at escalating prices. These actions created a false impression of strong buying momentum, aimed at supporting the share price, and resulted in an illegal increase in the share price. He exploited the timing of these transactions, during which he also canceled several buy orders for the shares in relatively large quantities, most of which remained unexecuted.

Furthermore, it was found that he fragmented these orders, thereby presenting a misleading picture of numerous investors placing buy orders for the shares at various price levels. These transactions, which constituted the violation, occurred during the trading session on February 8, 2026, for the company’s shares. This activity attracted market participants to buy the security and increased the perceived momentum in the share, enabling him to realize a profit of 7.96 thousand Kuwaiti dinars. He achieved this by selling the 5 million shares he intended to dispose of at the best available prices, taking advantage of the artificially inflated prices he had created after attracting traders to deal in the share at those synthetic price levels.