Articles
Companies

Home / NEWS / ‘International companies pushed risk onto MMG’

‘International companies pushed risk onto MMG’

by James Morgan on Sep 27, 2016


Adel-Al Mojil (above) says that, in the wake of the 2008 financial crisis, international construction firms operating in Saudi Arabia pushed all of their risk onto local contractors like MMG.
Adel-Al Mojil (above) says that, in the wake of the 2008 financial crisis, international construction firms operating in Saudi Arabia pushed all of their risk onto local contractors like MMG.

RELATED ARTICLES: Is DIFC Courts’ latest ruling good news for MMG? | Protiviti appeal against MMG court case dismissed | Saudi contractor MMG incurs $11m H1 2016 net loss

International construction outfits operating in Saudi Arabia moved all of their risk onto local contractors in the risk of the 2008 financial crisis.

This is the view of Adel Al-Mojil, son of Mohhamad Al-Mojil Group’s (MMG) founder, who – along with his father – was sentenced to five years’ imprisonment in June 2016 for misrepresenting his company’s value.

Messrs Al-Mojil strongly deny any wrongdoing, and claim that they have been made scapegoats for wider problems facing the kingdom’s construction sector.

Commenting in a video statement shared exclusively with Construction Week, Adel Al-Mojil said: “Unfortunately, after [MMG’s IPO and] the global financial crisis of 2008, the whole construction market was hit. There were serious deficiencies in our primitive contracts in Saudi Arabia.

“And [then], there was a dramatic shift as international companies operating in our sector moved very quickly to push all their risk onto local contractors – onto businesses [like] MMG.”

Al-Mojil expressed his regret that MMG’s management team lacked the experience necessary to deal with financial pressures that hit the firm, but said that many companies have struggled to deal with similar issues.

“It’s deeply regrettable that the management of MMG, following the IPO, was simply not experienced [enough] or able to deal with the pressures that hit MMG,” he said. “We were the first and we were the most high profile.

“But looking around the sector today, it seems that there are no management teams able to cope with the issues faced by the construction sector. The situation we have is very serious,” Al-Mojil added.

To view Adel Al-Mojil’s video statement in full, click here.



Advertisement




Articles
Companies