DUBAI, June 8 (Reuters) - Saudi Arabia’s Capital Market Authority (CMA) has halted trading in Mobily until it gets a response from the disgraced telecom operator on the likely impact on its earnings from an initial regulatory report examining accounting irregularities.
The regulator, which made the announcement via a bourse statement on Monday, has been investigating Mobily after the firm stunned investors by slashing 18 months of previously announced profits last November.
CMA investigators conducted site visits, interviewed “concerned parties” and obtained documents before submitting a report on Mobily’s financial statements to the company on Monday, the statement said.
The regulator instructed Mobily to determine the impact the regulator’s observations would have on its financial statements. It was not clear if this meant past or future earnings.
The stock will remain suspended until Mobily responds, the statement added.
Mobily, part-owned by Abu Dhabi’s Etisalat, also reported a huge fourth-quarter loss, revised its 2014 earnings to a loss from a prior-declared profit and made a further loss in the first quarter.
The company blamed these problems on accounting errors, which led its long-standing chief executive Khalid al-Kaf to leave the company earlier this year.
The regulator has recommended nine current or former Mobily officials be prosecuted for violations that include insider trading, a local financial news website reported last month.
The CMA said in March its probe was centred on suspicions Mobily had violated one of its market listing rules and two articles of the Capital Market Law, including provisions against insider trading. (Reporting by Matt Smith; Editing by David French)