Mobily shareholder meeting impacted by stock trade suspension

Mobily issued a statement earlier today confirming it had postponed its annual shareholder meeting, scheduled for this afternoon, after Saudi Arabia’s Capital Market Authority (CMA) suspended trading of its shares on the country’s stock exchange yesterday.

The CMA has been conducting an investigation into the company’s financials, and in a statement, the financial regulator said it will not resume trading until the operator “discloses the financial impact on its financial statements, in light of observations that have been submitted to the company”.

The watchdog said its observations looked into Mobily’s financial statements, obtained documents and added that it had interviewed “concerned parties” before submitting the report to the company. It is not clear whether the regulator is looking for a response based on past or future earnings.

Mobily said it was looking into the matter, and will announce a date for the annual shareholder meeting in due course.

The company, owned by Etisalat, has been under investigation by the CMA since November 2014, after the operator restated figures for 2013 and the first nine months of 2014, which it blamed on an accounting error.

The issue led to the suspension, and the subsequent release of founding Mobily CEO Khalid Al Kaf, earlier this year.

Mobily then revised its 2014 financial performance, which saw it turn a small profit into a US$243 million loss.

The issue led to the regulator briefly suspending its shares in February in order to ‘give the company time to announce a clarification related to one of its businesses’. At the time, the CMA said it would “look into continuing the suspension” after Mobily disclosed the reasons behind the loss. The regulator stated its original investigation was based on the violation of market listing rules, including provisions against insider trading.