DAMMAM, 8 August 2007 -- The Court of Grievances on Monday rejected a complaint by the Bishah Agriculture Development Co. (BADCO) that the Ministry of Commerce and Industry violated company law. The court, which did not provide the litigants with the details of its decision, directed them to collect copies of the verdict after three weeks, said Abdul Aziz Al-Haushani, a lawyer representing BADCO.

BADCO, which is under suspension from trading in the Saudi stock market following its continued losses earlier this year, had filed a plea against the Ministry of Commerce following media reports a few months ago that the ministry had made an adverse statement about the company.

In that statement, the ministry said that the company would have to fulfill certain conditions before it could restore its normal legal status. Those conditions, reportedly, included that the company would have to correct its financial situation in line with the recommendations of its legal advisers and auditors and hold two general body meetings.

One of the meetings should be an extraordinary meeting to decide the future of the company. The other meeting would be held to discuss whether the current board of directors should be allowed to continue or be dismissed.

Al-Haushani said his client's grievance was that the statement made by the ministry was at variance with company law in force in the Kingdom and so the company demanded that the ministry withdraw its statement.

The Saudi Capital Market Authority (CMA) suspended trading in BADCO shares following its continued losses on Jan. 13. The financial statement of the company for the period ending on Sept. 30, 2006 showed a net loss of SR22.3 million in that period.

The downturn trend of agricultural companies in the country had begun when the government launched its program of gradual reduction of subsidies for the production of water-intensive crops like wheat, alfalfa, peanuts, etc. One of the early firms to feel the impact was BADCO, which posted a net loss of SR1 million for 2003, slightly down from a net loss of SR1.1 million for the year before.

The lawyer said the company planned to submit a review petition before the appeal bench in the Court of Grievances as soon as it receives a copy of the current judgment.

By Faiz Al-Mazrouei

© Arab News 2007