MUSCAT: An interim board constituted by the Capital Market Authority (CMA) to stabilise the functioning of Raysut Cement, amid the discovery of financial anomalies in its accounts, has begun its deep dive into the factors that triggered last month’s financial crisis at the publicly traded Omani company – the nation’s largest cement producer.
In a filing on Thursday – its first since it was set up by the regulator last month, the interim board outlined actions it has since taken to get a better understanding of the company’s inner workings and the contributory factors behind its recent troubles.
Over the month or so since it has taken temporary charge, the Board and its subcommittees held multiple sessions primarily to ascertain the current operational status of Raysut Cement and its challenges. It also held meetings with senior management executives, and undertook an initial visit to the Salalah site of Raysut Cement’s flagship cement complex, it said.
“The main focus of the Board is to ensure that the operations of the company and its subsidiaries are uninterrupted, and Governance and Control measures are in place to ensure the sustainability of the company going forward,” the interim board noted in its filing.
Just earlier, Raysut Cement had revealed that it had racked up a post-tax loss of RO 93.686 million in initial, unaudited results for the financial year ended December 31, 2022. This compares with a loss of RO 12.924 million incurred by the parent company in 2021.
Invoking its powers under Commercial Companies Law and the Securities Law, the market regulator stepped in last month when the company failed to suitably address concerns over “material misrepresentations” uncovered by the Authority in Raysut Cement’s financial reporting for Q2 2022. The Authority intervened to dissolve the existing Board of Directors – powers it has exercised only for the second time in its history – and instituted a new ‘temporary board’ with a mandate to restore the company’s organizational and operational stability and thereafter to also address all of the shortcomings that led to its recent upheaval.
A key part of the interim board’s remit is to strengthen corporate governance, evaluate internal controls and enhance measures to safeguard the company’s value. At the same time, it has to ensure that Raysut Cement’s key assets in Salalah, Suhar and Ras Al Khaimah (UAE) are operating normally to ensure a steady inflow of revenue for the organization.
According to market experts, shares of Raysut Cement have significantly improved from 106 bz per share at the outset of the crisis, to 150 bz presently – a reflection of the sense of investor confidence returning to the company following the appointment of the temporary board to govern its affairs.
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