Saudi: MMG board resigns with immediate effect
The board of Saudi Arabia’s Mohammad Al-Mojil Group (MMG) has resigned in its entirety following the imprisonment of Mohammad Al-Mojil and Adel Al-Mojil
The board of kingdom-based contractor Mohammad Al-Mojil Group (MMG) has resigned in its entirety.
The news follows the decision of Saudi Arabia’s Committee for the Resolution of Securities Disputes (CRSD) – part of the Capital Market Authority (CMA) – to impose prison sentences on three of MMG’s members, including founder Mohammad Al-Mojil and his son Adel Al-Mojil.
Mohammad and Adel Al-Mojil were each sentenced to five years in prison for misrepresenting MMG’s value. A third unnamed executive from the contractor received a three-year prison sentence, according to news agency, Reuters.
A statement issued on behalf of the MMG board said that the “unexpected decision” of the CRSD, which it described as “fundamentally flawed”, had severely impacted its capability to deliver the company’s strategy.
“The decision to resign is, in part, due to [the board’s] serious concerns about the unlimited director and executive liabilities in the Kingdom of Saudi Arabia,” the statement explained. “These concerns have been clearly highlighted by recent announcements by the Capital Market Authority.”
The board added that it had “worked tirelessly towards achieving the greatest success for [MMG] and its employees during particularly challenging market and company conditions”.
The release also noted that substantial losses had been recuperated by the board, including the settlement of legacy contracts such as the Ibn Rushd claim, which is valued at $10.9m (SAR40m).
The statement continued: “In addition, an anticipated SAR950m [$259m] may be, with the support of the outgoing board secured from Saudi Aramco (the project’s owner), reclaimed from MMG’s work on the following project: Karan Utilities & Co-Generation, Manifa Co-Generation & main Substations, the King Abdullah Petroleum Studies and Research Center (KAPSARC) – Residential Package A&B & Associated Infrastructure, the Wasit Gas-Program-Inlet & Gas Processing Plant, and the King Abdullah University for Science and Technology (KAUST).”
MMG’s outgoing board stated that it had always “enshrined employees’ rights at the heart of the company”, and ensured the implementation of international best practice. It reiterated that at all times, MMG implemented its internationally recognised accounting principles in accordance with Saudi Arabian law.
The statement concluded: “Recent events highlight the dire need for a systematic and far-reaching overhaul of the construction sector in the Kingdom of Saudi Arabia, as well as the regulations which govern these firms.
“Finally, the board would like to take this opportunity to thank its employees for their work to date, wishing them and the company success in the future.”