The Financial Service Authority followed with great concern the news circulating on social medial about the resolution of the board of directors of Al Madinah Investment Holding Company (SAOG) to change its intention to convert from public joint stock company to closed joint stock company, which was disclosed on Monday September, 2, 2024, after disclosing on November 12, 2023 that its board of directors has resolved to convert the company into closed joint stock company.

FSA would like to clarify that conversion of a public joint stock company into any other legal form stipulated in the Commercial Companies Law is regulated in the Regulation for Public Joint Stock Companies issued vide decision No.  27/2021.

Article 35 of the Regulation for Public Joint Stock Companies provides for a set of documents the company must provide to obtain the FSA’s consent to convert from public joint stock company the foremost is providing a fair price offer by the shareholders who intend to buy the shares prior to completing the conversion procedures.

Thus, the company disclosed on the website of Muscat Stock Exchange (MSX) on July 29,2024 the FSA’s consent on the conversion to closed joint stock company together with the proposed share price and those who are committed to buy the shares and offer period for those who intend to sell their shares through the intermediary designated for this purpose “Financial Services Company”.

However, the company communicated with the FSA before the offer period to request approval for buying only from specific category of shareholders whose shares are less than fifty thousand shares (50, 000 shares). The company was informed such request is illegal and the offer must apply to all the shareholders of the company who intent to sell without limitation.

FSA is keen to comply with the applicable laws and regulations, therefore, emphasized to the company via official letter to adhere to Article 35 of the Regulation for Public Stock Companies and provide an offer to buy the shares from all the shareholders intending to sell their shares and disclose the same on the website of MSX to eliminate any confusion on this matter. However, the company, in its response to FSA, explained that the board of directors of the company resolved to cease the conversion process.

FSA emphasizes the importance of complying with the applicable laws and regulations regulating all supervised entities and that it will proceed with taking appropriates action in this regard.