Saudi Al Khodari explains delay in issuing financial statements

Riyadh –  Abdullah Abdul Mohsen Al Khodari Sons Company (Al Khodari) announced to the Saudi Stock Exchange (Tadawul) that it is unable to publish its financial statements for 2018 and the first three quarters of 2019 in due time.

This is due to a conflict with Ernst & Young (EY), the external auditors of the company, which Al Khodari said are still holding to their position to issue a disclaimer of opinion, as they have based their position on their inability to come to adequate satisfaction which would enable them to issue an audit opinion.

Meanwhile, Al Khodari rejects EY’s position to hold to their conclusion to issue an audit report with a disclaimer of opinion that will cause the suspension of company’s shares to continue, which may cause more financial losses to company’s shareholders.

Al Khodari views the auditors’ position as nonobjective, emphasizing its obligation to deal with the situation with transparency as responsibility towards shareholders.

Al Khodari further noted that the controversy with EY is due to the difference in views, including a disagreement regarding including a view on statutory requirements, which Al Khodari says have no impact on the fairness of its financial statements.

“The external auditors have based their position primarily on their inability to assess company’s ability to continue its operations,” the bourse statement further noted, adding that “the external auditors’ basis is blatantly contradicting with the principles and objectives of bankruptcy law and the ruling issued by the commercial court I in Dammam which issued its ruling to commence financial restructuring procedure of the company. The court has issued its ruling after it has been satisfied with the strong probability that the company will continue and creditors’ claims will be settled within a reasonable timeframe.”

Al Khodari’s management believes that it fulfilled its responsibilities towards shareholders and holds E&Y accountable for all statutory and professional responsibilities. Furthermore, the management apologized for not being able to determine the expected date to publish its financial statements, hoping that E&Y will rectify the content of their draft audit report within a week.

“Alternatively, the company’s board of directors would be considering, among other options, calling for a general assembly to discuss the matter with the shareholders,” the statement concluded.