Following a successful partnership with Thomson Reuters on the inaugural forum last year, ASAR – Al Ruwayeh & Partners (ASAR), Kuwait’s leading corporate law firm, and one of the region’s top tier firms, recently participated in the second Governance, Risk and Compliance (GRC) Forum in Kuwait.
The forum was initiated and organized by Thomson Reuters, a leading source of intelligent information for businesses and professionals. The forum has been designed to empower audit, risk and compliance professionals, business leaders, and the boards they serve to adapt to the currently changing legal landscape and application of best practices to effectively execute their business goals.
Mr. Hossam Abdullah and Mr. Ezekiel Tuma, Corporate, Banking & Finance Partners at ASAR, participated in panels covering a review of existing gaps and regulatory challenges regarding capital markets reforms and discussing developments in Kuwaiti laws and regulations on corporate governance, respectively.
Mr. Abdullah discussed amongst others the capital markets reform in Kuwait and recent legislative developments in the last 3 years such as the AML law, Foreign Direct Investment law, Electronic Transactions Law, with specific focus on Capital Markets laws and regulations.
He highlighted major matters regulated by the Capital Markets Authority among the 106 rules and decisions made by the CMA including disclosure requirements, corporate governance, qualifications of directors, CEO’s and top executives, and the new listing rules No. 23/2014.
He further elaborated on the privatization of the KSE followed by a summary of some key features of Kuwait’s new companies’ law including election and composition of the board of directors and noting cumulative voting, and minority shareholders protection.
Mr. Abdullah also touched on the Central bank’s implementation of the BASEL III capital adequacy standard for Kuwaiti banks and the phasing-in procedure that starts from the 1st January 2013 until the 1st January 2019 as well as the introduction of more constraints to the eligibility criteria of recognizing tier 2 capital in addition to the deletion of tier 3 capital which was recognized by the Base II standard. He emphasized the need for a Financial Stability Authority and the passing of the Insolvency Bill.
Mr. Abdullah said: “Kuwait is witnessing significant progress in reforming capital market and finance and has achieved milestones, specifically in relation to the adoption of the BASEL III reform package, which will no doubt improve the underlying performance of the financial sector. It also emphasizes the keenness of Kuwait to achieve global standards. It is an honor for us, to once again partner alongside distinguished industry members with the opportunity to discuss effective practices of governance, risk and compliance that will remain critical in these dynamic times.”
During his panel discussion, Mr. Tuma summarized the key principles of corporate governance and detailed the current legal and regulatory developments relevant to corporate governance including recent laws and regulations governing, transparency, rights of shareholders, board members liability to the company, positions of Chairman and CEO being separated in public joint stock companies and disclosure regulations.
He pointed out that the CMA recently issued a comprehensive corporate governance code No. 25/2013 which enshrines 11 key corporate governance principles to be adhered to by listed and CMA licensed entities. The corporate governance code includes measures targeted at strengthening the board of directors, ensuring fairness and accuracy of financial reporting, protection of shareholder rights and promoting timely and thorough disclosures.
Mr. Tuma noted that the issuance of the corporate governance code was a landmark development which should be followed up with comprehensive enforcement by the relevant authorities. He further discussed a few areas that need improvement such as increasing corporate governance requirements applicable to private companies and state owned companies as well as making available more comprehensive rights and remedies for minority shareholders and stakeholders such as creditors.
Mr. Tuma further said: “As we continue to explore and acknowledge the changes in our legal and regulatory frameworks, it is imperative to weigh the challenges and set policies in line with achieving or exceeding compliance obligations. While Kuwait has made significant steps towards addressing corporate governance considerations, we believe that both the regulators and the regulated have a key role to play in ensuring that Kuwait achieves the highest standards of corporate governance.”
With dedicated offices in Kuwait and Bahrain coupled with its associated offices and relationships, ASAR provides clients across an extensive range of industry sectors with comprehensive legal advice and support for their business activities in Kuwait, across the GCC and beyond.
The firm has been consistently rated as the leading corporate and commercial law firm in Kuwait by reputable legal guides such as the Chambers Global Guide, International Financial Law Review and the Legal 500. In 2013, ASAR was named as the “National Law Firm of the Year” by the International Financial Law Review (IFLR), the market-leading guide for financial law firms worldwide. The firm also won the “Best Restructuring Deal in the Middle East” award by IFLR during the same year.
Saturday, May 24- 2014 @ 14:04 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.