Riyadh – Mubasher: The Capital Market Authority (CMA) has announced the imposition of financial penalties totaling SAR 40,000 on Red Sea International Company following breaches of the Rules on the Offer of Securities and Continuing Obligations.
The enforcement action stems from the company’s failure to provide timely public disclosures regarding significant contracts secured by one of its subsidiaries.
According to the regulatory body, the delays in reporting these material events constituted violations of transparency requirements designed to ensure equitable access to information for all market participants.
The regulatory decision, issued by the CMA Board on 28 June 2026, identifies two specific instances where Red Sea International failed to adhere to the mandatory reporting timelines established under Saudi Arabia’s capital market regulations.
The first violation pertains to paragraph (A) of Article 79 of the Rules on the Offer of Securities and Continuing Obligations. This breach involved a substantial contract signed by the company’s subsidiary, The Fundamental Installation for Electric Work Co. Ltd. (First Fix).
The contract in question was valued at SAR 1.52 billion and was officially signed on 11 July 2024. Under market regulations, listed entities are required to disclose such material developments to the CMA and the general public without delay. However, the CMA noted that Red Sea International did not announce the transaction on the Saudi Exchange (Tadawul) website until 17 September 2024, after the conclusion of the trading session. This significant gap between the execution of the contract and its public announcement was deemed a failure to meet continuing obligation standards.
The second violation involved paragraph (A) of Article 64 of the same regulatory framework. In this instance, the subsidiary entered into another contract valued at SAR 265.99 million on 19 January 2025. Despite the requirement for immediate disclosure, the company did not publish the details on the Tadawul website until after the trading session on 20 January 2025.
While the delay in this second case was considerably shorter than the first, the CMA maintained that the failure to disclose "without delay" still constituted a breach of the amended board resolutions governing market conduct.
The total fine of SAR 40,000 serves as a formal disciplinary measure against the company.
The CMA emphasized that these rules are in place to maintain market integrity and protect investors by ensuring that all price-sensitive information is disseminated in a prompt and transparent manner.
By failing to report the signing of these high-value contracts by its subsidiary, Red Sea International was found to have hindered the flow of essential information to the investment community.
