REGARDING THE SITUATION OF THE SAUDI INDIAN COMPANY FOR COOPERATIVE INSURANCE (WAFA INSURANCE)
Reference to the announcements of the Saudi Indian Company for Cooperative Insurance (“WAFA Insurance”) (“The Company”) dated 16/11/1439H corresponding to 29/07/2018 and 25/11/1439H corresponding to 07/08/2018 on the Saudi Stock Exchange (Tadawul) website pertaining to its accumulated losses which exceeded 50% of its paid-up capital.
The CMA would like to clarify that in the case of the company not holding the Extraordinary General Assembly within 45 days since the Board of Directors were informed that the losses of the company have reached 50% of its paid-up capital to vote on whether to increase or decrease the company’s capital to a degree where the losses would be less than 50% of the company’s paid-up capital, or the dissolving the company before the time specified in its bylaws, the company shall be considered dissolved by the force of law on 01/01/1440H corresponding to 11/09/2018. Moreover in the case that the Extraordinary General Assembly meeting was held in the period mentioned above, and a decision has not been reached or if it was decided to increase the capital in accordance with the conditions set out in Article 150 of the Companies Law, and the entire capital has not been subscribed for within ninety days from the Extraordinary General Assembly’s resolution for capital increase, the company will be deemed terminated by the force of the companies law.
The Saudi Arabian Monetary Authority also would like to clarify that the capital reduction option for the company is not available, due to the fact that the paid-up capital of the company has reached the minimum required to carry-out insurance business as stipulated in paragraph (3) of Article 3 of the Cooperative Insurance Companies Control Law issued by Royal Decree No. (M / 32) dated 2/6/1424H. The company must also obtain the approval from SAMA prior to starting the procedures to increase its capital.
The termination of the company by the force of the law or its dissolution before the time specified in its bylaws will occur for any of the reasons stated above in accordance with the conditions set out in Article 150 of the Companies Law, will result in the cancellation of the listing of the company’s shares on the Saudi Stock Exchange (Tadawul) once it is terminated by the force of the Companies law or its dissolution before the time specified by in its bylaws.
This announcement is to emphasize the CMA’s and SAMA’s regulatory and supervisory role to protect the rights of all market participants, protect the rights of insured, and beneficiaries of the insurance coverage.