New regulations for Tadawul loss-making firms effective April 22

Saudi Arabia’s market regulator, the Capital Market Authority (CMA), will start implementing new rules governing listed companies with accumulated losses of 20 percent of their capital on Saturday, April 22, the CMA said in a statement.

Previous regulations affected companies with losses representing 50 percent or more of their capital. However, they were amended to include companies with losses representing more than 20 percent.

Now, companies with losses above 20 percent and less than 50 percent of their capital have to immediately publish in details the reasons behind their losses.

Firms with losses above 50 percent of capital have to immediately disclose the reasons behind their losses, and the board must then call for an extraordinary general meeting to decide to increase the company’s capital, reduce it, or liquidate before the date defined in the articles of incorporation.