Trading halt on some shares affects small investors

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‘Audit authorities implement procedure for existence of legitimate threats’

KUWAIT CITY, April 5: The trading on shares of listed companies at Boursa Kuwait (the stock exchange) had a negative impact on small investors, said a number of Kuwaiti economists on Wednesday. In separate interviews with KUNA, the economists indicated that the holding of trade on some shares were attributed to several factors including delay in issuing periodical financial statements, inability to pay due fees or other technical factors. Member of the board for Sorooh holding company Suleiman Al- Wuqayan stressed that there was a need for strict procedure to prevent holding of trade, saying that those behind such acts must be subjected scrutiny by auditing authorities.

Shareholders also must form blocs to question the board of directors of companies during general assembly to view the real reasons behind holding of trade and prevent loss on their part, he added. On his part, Maitham Al-Sha’khs — an economic expert — said that the decision to hold trading of shares aimed at protecting investors, stating that auditing authorities implement such procedure for the existence of legitimate threats. However, such procedure is not ideal for solving problems pertaining to bad management and lack of professionalism, he affirmed.

Proposals
He went on to say that there were proposals to impose penalties on those causing the holding of trade with such punishment ranging from excluding individuals from membership of companies’ boards and other disciplinary measures. He noted that holding shares would affect foreign investors and steering clear from doing business in the Kuwaiti shares market.

Also providing his input, chairman of the shareholders society Mohammad Al-Tarrah said that some members of the boards of halted companies seem to delay their financial statements intentionally during the year to cover up some operational losses that might trigger the wrath of investors, which in turn lead to more market loss. The holding of companies shares impacted the market operation negatively especially to financial mediators who lose commission and also smalltime investors who cannot trade under such circumstances.

This news has been read 9305 times!