Effective from 2013-03-08 - Mar 07 2013 To view other versions open the versions tab on the right
1.
Any of the following is a related party for the purposes of this Regulation:
a.
Any member of the Board or its committee;
b.
Any member of Senior Management;
c.
Any person directly or indirectly holding or controlling (5%) or more of the capital or voting rights of the Finance Company, and any entity in which such person directly or indirectly holds or controls (5%) or more of the entity’s capital or voting rights;
d.
Any person directly or indirectly holds or controls (5%) or more of any class of securities that give their holders the right to a share of the profits or income of the Finance Company;
e.
Any entity in which the Finance Company directly or indirectly holds or controls (5%) or more of the shares or interests or voting rights; and
f.
Any ancestor or descendant up to the second degree, or spouse of any of the persons listed in the preceding Subparagraphs (a) through (d).
2.
In accordance with Article 12 of the Law, the Finance Company may incur an Exposure to a related party only on a commercial basis and after obtaining sufficient collateral so that the Finance may not exceed (60%) of the collateral, and if the Finance is more than (500,000) five hundred thousand riyals, there must be a consensus decision of the Board to do so.
3.
The Finance Company may not incur an Exposure to a related party of (10%) or more of its paid-up capital and reserves without obtaining a non-objecting letter from SAMA. In all cases, the aggregate of all Exposures to related parties must not exceed (50%) of the paid-up capital and reserves of the Finance Company.
4.
The Finance Company must not incur any Exposure to a related party that either directly or indirectly holds or controls (25%) or more of the shares, interests or voting rights in the Finance Company or in which the Finance Company holds or controls directly or indirectly (25%) or more of the shares, interests or voting rights.
5.
The Finance Company must not incur an Exposure to any of its employees that is not a related party in excess of four months’ salary of such employee, except through Finance programs organized by the company for its employees, approved by the Board and after obtaining a non-objecting letter from SAMA.
6.
Without prejudice to the public and private rights prescribed by laws, any Board member of the Finance Company or any external auditor who receives Finance in breach of any of sections (1/b), (1/c), or (1/d) of Article 12 of the Law, shall be deemed dismissed from the date of receiving the Finance, and the Finance Agreement in this case shall be deemed void.
