Saudi Arabia’s market regulator on Sunday suspended shares of the telecoms operator Etihad Etisalat for the second time this year.
The watchdog said it was waiting to hear from the company, also known as Mobily, about compensation for shareholders after earnings were misstated last year. More than US$5 billion has been wiped off the company’s market value since last year.
• UPDATE: Saudi Arabia's Capital Market Authority (CMA) lifted a one-day suspension on trading of Mobily's shares, the stock market regulator said in a statement on Monday.
“This suspension is pending a clarification from Mobily about the preliminary decisions issued by the Committee for the Resolution of Securities Disputes on the lawsuits filed by some investors regarding compensation for the losses they suffered as a result of the financial statements released by the company,” said the Capital Market Authority in Riyadh.
Etisalat, the UAE's biggest telecoms company, owns a 27.5 per cent stake in Mobily, the kingdom's second-largest mobile phone company.
The Capital Market Authority, Mobily and Etisalat were not immediately available for comment.
The authority has been investigating Mobily since late last year because of alleged accounting irregularities that led Mobily to restate its earnings.
The regulator assigned a special team to look into Mobily’s finances, which has raised concerns over its accounting methods.
“It just looks very bad and it’s very difficult for investors to have their confidence restored in this company,” said Sanyalak Manibhandu, the head of research at NBAD Securities.
“It just goes on and on. This time, it’s been initiated by investors. They want to get compensation.”
Mobily shares were initially suspended from trading on June 8 and resumed trading on August 3.
On November 3 last year, Mobily reported a 71 per cent drop in its third-quarter net profit and restated its profit for the past year and a half before that date, saying that there was a timing error in recognising revenue from a promotional campaign.
Mobily shares have lost more than 60 per cent of their value since last November.
mkassem@thenational.ae
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