The General Secretariat of the Committees for Resolution of Securities Disputes (GS-CRSD) announces the issuance of the Appeal Committee for Resolution of Securities Disputes' (ACRSD) final decision No. (4147/L.S/2026) of 1447 H., dated 14/08/1447 H., corresponding to 02/02/2026, on the public penal case filed by the Public Prosecution against two members of the Board of Directors of the Mediterranean and Gulf Cooperative Insurance and Reinsurance Company (Medgulf), being: Lotfi Fadel Alzein, and Muhammad Bashar Fadel Lotfi. The decision concluded with the conviction of the abovementioned individuals of violating Article (229/6) of the Companies Law issued by Royal Decree No. (M/6) dated 22/03/1385 H., for committing the acts of: Registering false information in the Company's budgets; Neglecting to include facts and material disclosures in its reports with the intention to conceal the Company's financial position by the increased statutory reserves of the Company for the financial year of 2013, which are retained at the Saudi Investment Bank, and by the decreased interest income classified as commission income by (94%); Failing to disclose all commission revenues from the Saudi Investment Bank; Failing to classify the current account at the Banque de Credit National as a party connected to the Company; Failing to disclose the outstanding balance and transactions with the Banque de Credit National (related-party) in the Company's financial statements as related-party transactions; Failing to disclose the Company's investment with Alistithmar Capital (a subsidiary of the Saudi Investment Bank) in the (Medgulf investment fund A) amounting to (SR. 53,837,026) in the financial statements for the year 2013, by recording it as transactions of related-parties despite the Bank being one of the founding shareholders of the Company; and Failing to disclose the Company's investment (ORIX Sukuk A+) amounting to (SR. 7,500,000) in the financial statements of the year 2013, despite the fact that ORIX Company is a shareholder with a (25%) in the Medgulf Bahraini Company and a founder and shareholder in the Company; as well as what had been proven of the existence of differences between the trial balance and the general ledger of the Company for the years (2011, 2012, 2013), when compared to the current accounts of the subsidiaries, in addition to the existence of differences between the Company's account balances (general ledgers) and the accounts within the subsidiaries (general ledgers) for the years (2011, 2012, 2013).
The decision included the imposition of the following sanction upon both of them as follows:
First: Lotfi Fadhel Alzein
Imposing a fine upon him amounting to (SR. 120,000) one hundred twenty thousand Saudi Riyals.
Second: Muhammad Bashar Fadhel Lotfi
Imposing a fine upon him amounting to (SR. 120,000) one hundred twenty thousand Saudi Riyals.
Furthermore, any person affected by these violations in this case is entitled to file a compensation claim with the CRSD for the damage he/she suffered from due to these violations, provided that such claim is preceded by a complaint filed with the CMA on this regard, via the following link: (File Complaint)