No request for increase in last quarter of fiscal yr
KUWAIT CITY, March 12: Ministry of Commerce and Industry has issued new conditions and procedures for increasing or reducing the capital of shareholding companies, reports Al-Rai daily.
According to decision No. 100/2018 issued by Minister of Commerce and Industry Khalid Al-Rawdhan, the companies that are willing to reduce or increase their capital have to follow specific procedures that are included in the decision.
The decision has five main articles regarding the technical details of each case related to reducing and increasing capital. It states that companies have to provide annually-audited financial data. If six months of the fiscal year have passed, the company has to provide periodical data.
The requests for increasing capital during the last quarter of the fiscal year will not be accepted. Increasing the capital can be covered by the issuance of shares to be repaid via ways specified in article 159 of the companies’ law No. 1/2016. New shares can be issued for employees of the company based on the ministerial decision No. 337/2004. Changing debts into loans, securities or sukuk requires the approval of relevant monitoring bodies. There must be a written approval from the creditor where he states that he approves the change of debts into securities or loans.
The decision stressed the need for existence of authorized assets evaluator based on article 11 of the companies’ law No. 1/2016, taking into consideration the regulations specified in the third chapter of the 11th book and the first chapter of the fifth book in the executive decree of the law No. 7/2010 of Capital Market Authority (CMA) and its amendments.
The minutes of the company’s general assembly must be attached with the request for increasing capital. It should include the reasons for the request. Concerning the conditions for reducing the capital, the company should attach the minutes of the general assembly including the reasons for their request as well as approval of the relevant monitoring bodies