Kuwait Court of Cassation principle number 1706

A shareholder, whether an individual or a company, in a shareholding company listed on the Kuwait Stock Exchange. His obligation to notify the Exchange administration and the company’s Board of Directors, by registered letter with acknowledgement of receipt, of every direct or indirect interest he has in the company’s shares whenever his holding in its capital is 5% or more. Those companies must disclose the names of their shareholders whose holdings reach this percentage of the capital and every change thereto. Article (1), Law 2 of 1999. - The shareholder must give notice of his existing interest whenever it reaches 20% of the capital of any entity or other legal person, where either owns shares in the company. Article 2/d, Law 2 of 1999. - Disclosure of interests. Its manner and the specification of the time limits and means by which it is made. Left to the Kuwait Stock Exchange. The Exchange administration’s obligation to establish a register containing the notifications it receives. Interested parties’ right to inspect this register in accordance with the arrangements and conditions specified by the Exchange. Article 3 of the aforementioned Law. - Failure to comply with disclosure of interests under Law No. 2 of 1999. Exclusion of the shares involved in the violation from the quorum necessary for the valid convening of the company’s general meeting and from - 489 - Administrative voting on the resolutions it adopts for 2 electoral terms. A mandatory sanction that must be imposed on the violator. Debarring him or his representative from standing for membership of the company’s Board of Directors for 2 electoral terms. A discretionary sanction whose imposition is conceivable only in relation to the shareholder. - Establishment that the company against which the challenged decision was issued does not own shares in the shareholding company listed on the Kuwait Stock Exchange. Its effect. It is not subject to Law 2 of 1999. The challenged judgment’s conclusion annulling the decision issued against it excluding shares as being owned by it in the listed company, because the decision had no subject matter to which it could apply. Does not vitiate it. - The person obliged to disclose an interest within the meaning of Articles 1 and 2 of Law No. 2 of 1999. What is meant thereby. A shareholder in a company listed on the Exchange whose holding reaches 5% or more of its capital. Its effect. The interest intended in paragraph (d) of Article (2) of this Law is the shareholder’s interest.