TAIF: Company directors and executives face
jail terms of up to five years and fines up to SR5 million for violations
including not submitting proper auditing documents and defrauding partners and
shareholders.
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| Photo Credited to the Owner |
The Bureau of Investigation and Public Prosecution is authorized to take action for various violations including registering false financial statements, misusing company funds for personal gain, acting maliciously against other members of the firm, or for the benefit of another company.
Executives must also not take profits unlawfully, obstruct the general assembly of the company, and take loans or other forms of financial aid that contravenes company rules. Those who are aware of these violations but do not report them will also be penalized, the ministry stated according to the report.
It is also an offense to prevent shareholders and other members of the company from exercising their rights, to collude with others in terms of voting, and withhold information from fellow directors, executives and shareholders.
Company executives and board members may also not neglect compiling minutes of meetings, obstruct authorized people from viewing company documents, or fail to announce any contracts signed.
They must also report if the company is liquidated and various administrative violations. They are obliged to protect the company, register it properly and ensure that they do not falsely publish names of people not connected with the company for underwriting purposes.
They must not impersonate owners or shareholders, or use the company for purposes other than stated in the license. Those who are assigned the liquidation of the company or uses funds and assets that hurts the firm in any way, will be penalized.
This includes anyone who distributes or takes profits that contradict the country’s commercial laws and company rules.
Source: ArabNews
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