Kuwait bourse row over rule changes deepens

 

A row between publicly traded Kuwaiti companies and the Arab world's second-largest bourse worsened on Thursday when more than a third of all listed firms demanded it retract recent reforms.


Nine more firms including Kuwait's biggest industrial conglomerate, National Industries Group Holding joined a group of companies lobbying to get the rules cancelled, according to a statement published in the local press.

The stock exchange said in October it would halt trading in shares of companies that buy into or sell out to firms the stock exchange has previously turned down for listing. It also said it would halt trading for a year in companies that had more than quadrupled their share capital.

The bourse said the rules aimed to protect investors against phoney companies and improve transparency.

The firms said the new rules were too bureaucratic and would deter the very foreign investors Kuwait wants to attract as it tries to diversify its economy away from oil.

"The companies demand to change the situation that resulted from the bourse's recent decisions on trade bans, listings, capital increases and mergers," they said in the statement.

Major firms such as Mobile Telecommunications Co (Zain), Kuwait Projects Co (KIPCO) and Islamic investment firm Investment Dar are among the 70 group companies who are opposed to the bourse's rules.

The row has been dragging on for months despite the chamber of commerce's efforts to broker a solution.

Kuwait is the only Gulf Arab state that has no financial regulator to supervise the stock market as plans to establish one have been stalled in parliament, which was dissolved by the country's ruler last month.

The bourse lists 197 companies, according to Reuters data.

The protest statement from the firms came a day after the stock market lost yet another law suit against a firm belonging to the family-owned Kharafi Group over a trading ban.


The bourse had banned the Kharafi Group from trading shares in 10 of its firms last year for violating disclosure rules, but courts have overturned the decisions. (Reuters)  
 
 
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