SITC investors face heavy losses
Investors in failed telecom SITC could face heavy losses says Reuters
Investors in the failed Saudi Integrated Telecom Co (SITC) could face heavy losses according to a report from Reuters.
The telco made an initial public offer (IPO) in 2011 but never started operations, and was ordered to be liquidated by royal decree in May. Trading of SITC's shares already had been suspended since February.
"Investors are shocked," said Mohammad Omran, a member of the Saudi Economic Association (SEA). "The CMA made a big mistake by allowing the IPO to go ahead."
Some shareholders may receive a pay-out from the liquidation committee, which comprises the CMA, the Ministry of Commerce and the telecoms regulator, as the company had 100 million shares in issue and reported net assets of 910 million riyals at the end of 2012.
"In the case of liquidation, this amount will be distributed to the shareholders after reimbursement of any outstanding debts such as wages, rent, bills, etcetera," said Ibrahim Alnaseri, SITC's legal adviser and spokesman.
The royal decree was issued by King Abdullah, in part as support for his promise in 2012 to ensure trading rules applied to everyone, including the ruling al-Saud family. The company's chairman is Prince Saud bin Khaled bin Abdullah Al Saud, who held a 43% stake in SITC as recently as last September.