KUWAIT CITY, Dec 1: The withdrawal of Kuwaiti citizenship from individuals found to have obtained it through forgery has revealed significant legal and procedural complications for companies in which these individuals hold shares. According to informed sources, the Ministry of Commerce and Industry—working closely with the Ministry of Justice and other relevant authorities—is examining solutions to protect the rights of remaining shareholders and prevent disruptions to their financial and legal standing.

Officials report that several owners of non-listed companies have recently approached the Ministry of Commerce seeking guidance. These companies include partners whose Kuwaiti citizenship was revoked due to forgery, leaving operational and regulatory gaps. Owners have requested procedural mechanisms that would allow them to renew their commercial licenses and ensure the uninterrupted flow of revenue into company accounts. They warn that any halt in liquidity resulting from administrative restrictions would severely impact business performance and continuity.

One category currently under review involves companies in which non-Kuwaiti shareholders collectively hold around 49 percent of the shares. In contrast, the remaining 51% is owned by individuals whose citizenship has been revoked. Although the 49 percent shareholders may possess a general power of attorney and, in some cases, serve as general managers, they still face legal obstacles. These include the inability to renew commercial licenses or replace the revoked partner with a new one. Under Ministry of Justice regulations, anyone listed on the blacklist is restricted from disposing of their assets—including corporate shares—preventing any legal restructuring of ownership.

Sources explained that the entry or removal of partners requires official documentation confirming the eligibility and consent of all parties involved. This is necessary to ensure that no future legal disputes arise with either the partner or the state. However, with the revoked partner legally frozen and unable to sign documents or authorize changes, the remaining shareholders are unable to proceed with dissolving the partnership or filling the managerial gaps needed to sustain operations effectively.

They further disclosed that all powers of attorney issued in the name of the revoked partner are now invalid. This creates a major challenge when renewing commercial licenses, as Kuwaiti law requires a Kuwaiti partner holding at least 51 percent ownership—a condition that is impossible to meet while the revoked partner’s shares remain legally blocked.

Exploring Legal Remedies

The Ministry of Commerce is now studying potential legal solutions to address this unprecedented situation, which is not clearly outlined in the current Companies Law. Given the growing number of similar cases, officials believe a standardized procedural framework must be developed to safeguard the interests of all parties, including the state.

Among the proposals under discussion is the administrative suspension—or procedural freezing—of the revoked partner’s stake. This would allow the remaining shareholders to continue managing the company, assuming full responsibility for decisions and ensuring the company’s rights are protected. Another option under consideration is to temporarily allow the removal of the revoked partner and the appointment of a new partner or legal guardian to oversee the suspended shares until a final settlement—such as liquidation or an official freezing—is issued by the competent authorities. Such a mechanism would also regulate cash flows in and out of company accounts to prevent informal handling of funds or exposure to financial risks.

Auctioning the Revoked Partner’s Shares

One of the early scenarios being examined involves allowing state authorities to auction off the revoked partner’s shares to the public. The proceeds would be transferred to the state treasury, safeguarding public funds while also stabilizing the company’s legal and financial position. This approach would help the remaining partners maintain business continuity without being trapped by procedural deadlocks.

Sources stressed that all proposed scenarios remain preliminary. Any final solution must be approved by the Cabinet, which is responsible for determining the mechanisms for managing citizenship revocation cases. Once approved, the Ministries of Commerce and Justice would be responsible for implementing the decisions.