In reference to the Royal Decree No. (15016) dated 16/03/1442 AH regarding the suspension of some provisions of the Companies Law issued by Royal Decree No. (M / 3) dated 28/01/1437 AH, and in reference to the joint coordination between the Capital Market Authority and the Ministry of Commerce, the Capital Market Authority would like to clarify the content of Royal Decree regarding listed joint stock companies, as it includes the following:
1. Exemption to the provision of Article (150) of the Companies Law:
(A) Extension of the period for which the board of directors must invite the extraordinary general assembly once the board of directors became aware of the losses of the joint-stock company reaching half of its paid-up capital, to (sixty) days, from the date the board of directors become aware of the losses, for a period of (two years) from the date of 01/08/ 1441 AH.
(B) Extension of the period during which the extraordinary general assembly meeting must be held to become (one hundred and eighty) days from the date the board of directors become aware of the losses for a period of (two years) from the date of 01/08/1441 AH.
2. Paragraph (2) of Article (the one hundred and fifty) of the Companies Law shall be suspended for a period of (two years) from the date of 1/8/1441 AH, and the joint-stock companies shall upon reaching the amount specified in Paragraph (1) of Article (the one hundred and fifty) of the Companies Law to continuously disclose the developments of the losses in accordance with the regulatory rules set by the Ministry of Commerce and the Capital Market Authority - each within its mandates , during the period of suspension of the work of Paragraph (2) of the aforementioned Article.
3. Exemption to the provision of paragraph (1) of Article (one hundred thirty-three), joint-stock companies are permitted to re-appoint an auditor whose term of appointment has reached (five) continuous years, for a period not exceeding (two) additional years, as long as the total period of his appointment does not exceed (Seven) continuous years for the audit office, and (five) continuous years for the partner who supervises the audit process, provided that this exception ends after the lapse of (two years) from the date of 01/08/1441 AH.
It should also be noted that the Authority has set regulatory rules that require listed joint stock companies that its accumulated losses amounted to 50% or more of the capital, to disclose the latest developments of accumulated losses in implementation of the royal decree.