Abdullah A. M. Alkhodari Sons Co. announces the termination of a CEO
|Announcement Detail||Abdullah A. M. Alkhodari Sons Co. announces the termination of Engineer /Ali Hussein Al-Busaleh), from his position as a CEO |
Abdullah A. M. Alkhodari Sons Co. announces the issuance of the Board of Directors’ decision dated 28/7/2021 to terminate the contract of the company’s CEO, Eng. Ali Hussein Al Bu Saleh, for a legitimate reason based on Article 80 of the Labor Law. The company stands by its legal rights to observe past violations of the former chief executive officer, according to the reasons and clarifications set out below:
1.The CEO joined the company on 28-09-2020 and continued his work in the Company for nine months without taking the necessary measures to submit a proposal for the financial restructuring of the Company to protect the interests of the employees, shareholders and creditors of the Company. The Commercial Court have given approval to extend the deadline for submitting the proposal for the two consecutive periods, even than the CEO did not make any efforts to prepare a proposed plan for the payment of creditors. This was a serious damage to the company as it may lead the company’s liquidation in the event that the proposal was not submitted on time, and it is in violation of the articles 200 of the bankruptcy law.
2. His attempt to obstruct the submission of the financial restructuring proposal by claiming (in writing) that the Board of Directors cannot legally submit the proposal to the Court because of the lack of quorum of the Board without relying on an article of the bankruptcy law, which the Board confirmed that the claim of the CEO was misleading and based on false information. It is stipulated in the Company's bylaw in Article (22) subparagraph (22-1) that "the Chairman of the Board of Directors of the Company shall be represented before the judiciary, arbitral tribunals and others, including government bodies, notaries and courts of all types and levels”. Since the company is under a financial restructuring procedure as per the decision issued by the commercial court in Dammam, so the Chairman of the Board has the right to represents the Company in the Court with regards to the procedure, and not as the former CEO claimed.
3. He questioned the proposal which was submitted by the Board and accused the Board of deceiving the shareholders based on the premise that if the proposal is rejected by the creditors, the company will go into liquidation. He ignored the fact that his failure to perform his functions and duties, foremost of which was working on preparing an appropriate plan to be submitted to the court on the agreed date, is the one which leads the company to liquidation, which is the real deceiving to the shareholders and creditors.
4. Defamation of the Board of Directors to the relevant authorities and the Bankruptcy trustee with untrue and inappropriate words with contradictory imaginary allegations that was neither the style of the professionals nor the level of the executive management.
5. He accused the Board of directors before the relevant authorities of interfering in the affairs of the executive management. He ignored the facts mentioned in Article (20) subparagraph (20-1) of the company’s bylaw which gives the Board, the widest powers and authorities in managing the Company’s affairs and supervision of its business. However, the board did not intervene in any matter that requires a decision of the Board of Directors, and merely responded to the emails they received from the Company or responded to complaints from an official body (government agent) against the performance of the Executive management.
6. The executive management used the lack of quorum of the board to restrict board members and paralyze the Board even with matters that do not require the approval of the board of directors. On the other hand, a strange contradiction, and a clear violation from the executive management by insisting on selling the company's assets in an unacceptable way and making repeated attempts to obtain the Board of Directors' approval for the sale, ignoring that the decision to sell the assets requires the approval of a full-fledged Board of Directors.
7. He withdrew a large amount of cash from the company's fund in an irregular manner under the pretext of performing a business task and did not perform the required task and did not return the funds to the Company. For his personal benefit, he ignored the fact that the Company is going through financial distress and deficits. He was absent on the day following the withdrawal of the amount and did not send any justification and remained silent and did not respond to the Company's letters to date indifferent to the regulations and laws.
8. Failure to sense the responsibility of the executive position in the Company’s work, which he assumes, and the tasks assigned to him, and the seriousness of the critical time the company is going through in carrying out the Company’s financial restructuring, by being absent from work from 04-07-2021 until the date of the announcement without a legal justification and without handing over the tasks and contracts that are under his control, and ignoring to response to the Board of Director’s Communications to abide by the regulations and restrictions stipulated in the labor law.
Accordingly, it was decided to dismiss the CEO on the basis of Article (80) of the Saudi Labor Law, while keeping the company's legal right by monitoring all irregularities and taking appropriate action and announcing it in time.
The Capital Market Authority and the Saudi Stock Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.