First Milling Company announcement of the latest developments regarding a lawsuit filed by the General Food Security Authority which was previously announced in the prospectus and examined by the Committee in charge of reviewing the violations arising from the implementation of the provisions of the Flour Mills Law, for violating the provisions or regulations of the Flour Production Mills Law
|Introduction||In reference to what has been announced as part of the Initial Public Offering Prospectus published on 05/09/1444H corresponding to 27/03/2023G and regarding the ongoing dispute related to the lawsuit filed by the General Food Security Authority (GFSA) against First Milling Company, the Company announces receiving decision number (2) issued in case number (4) for the year 2023G from the Committee in charge of reviewing the violations arising from the implementation of the provisions of the Flour Mills Law via email on 10/03/1445H corresponding to 25/09/2023G. |
The decision can be appealed within 60 days of receiving notice.
|Lawsuit Opponent||General Food Security Authority|
|Name of the Plaintiff||General Food Security Authority|
|Type of the Lawsuit||Violations of the Provisions or Regulations of the Flour Mills Law|
|Name and Location of the Competent Judicial Authority||The Committee in charge of reviewing the violations arising from the implementation of the provisions of the Flour Mills Law|
|Date of Submitting the Lawsuit||2023-03-23 Corresponding to 1444-09-01|
|Summery of the Lawsuit and its Reasons||The General Food Security Authority (GFSA) filed a lawsuit against the First Milling Company, reviewed by the Committee in charge of reviewing the violations arising from the implementation of the provisions of the Flour Mills Law, whereby it claimed that the Company had violated one of the terms of the agreement to supply subsidized and non-subsidized flour and one of the terms of the license granted to it by GFSA. In addition to exceeding the sales quantities permitted by GFSA, the Company was notified of this lawsuit on 02/04/2023G. |
As a result, GFSA requested the issuance of fines against the Company with a total value of 69,763,099.50 Saudi riyals.
On 30/04/2023G, the Company submitted a memorandum in response to the lawsuit submitted by GFSA. On 25/09/2023G, the Company received a response confirming that a fine totaling SAR 6,303,176.50 has been imposed. As such, the total value of the fines now stands at SAR 6,303,176.50 as opposed to the previously mentioned amount of SAR 69,763,099.50
|Expected Financial Impact Including the Claimed Sums, Fees and any other Charges||There is no financial impact as the Company has built a provision of 8,853,334 million riyals as a reserve being part of the expenses due in the financial statements for the year 2022.|
|Any Substantial Legal, Regulatory, or Operational Risks that may Result from the Lawsuit, including the Results of such Impact on the Company's Financial, Legal or Operational Standing||None|
|Measures Taken by the Company, including the Estimation of the Potential Liability Resulting from the Lawsuit||The Company will follow up and discuss subsequent procedures, including the right to appeal the decision to the Administrative Court within (60) days from the date of notification of the decision, in accordance with the provisions of Paragraph (3) of Article Twenty-Seven of the Flour Mills Regulations. |
As the First Milling Company respects the committee's decision, it affirms the integrity of its procedures and its full compliance with all regulations and laws set by regulatory authorities, including the General Food Security Authority, to safeguard the rights of its shareholders and customers. The Company also looks forward to advancing its vision of becoming the first choice and preferred partner in both the food and feed sectors and the reliable source of vital products for the markets and communities in the region.
|Additional Information||Any subsequent actions by the Company in this regard, if any, will be shared.|
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