Riyadh – Mubasher: The shareholders of Edarat Communication and Information Technology Company (Edarat Group) rejected several proposed related-party contracts involving Al Moammar Information Systems (MIS) and other entities, granting the company a six-month window to rectify these regulatory standing issues.
Shareholders voted, during an Extraordinary General Assembly meeting held on 14 June 2026, against approving contracts and services conducted in 2025 with MIS, Medical Excellence Systems Company, and Edarat Lebanon, according to a bourse filing.
These transactions involved various board members, including Chairman Abdullah bin Ghazi Al Ghamdi, Vice Chairman Adel Fouad Rezk, and CEO Eric Ernest Badawi, who held direct or indirect interests.
The rejected contracts totaled approximately SAR 85.80 million across four separate items.
Meanwhile, the shareholders approved the Board of Directors' recommendation to increase the company’s capital by 50% to be funded by capitalizing SAR 25.20 million from retained earnings. The capital increase will be carried out through the issuance of bonus shares.
Edarat stated that the primary objective of this capital hike is to bolster its capital base and support future activities, aligning with its long-term growth strategy.
Eligibility for the bonus shares is set for shareholders registered at the Securities Depository Center (Edaa) by the end of the second trading day following the assembly date.
In addition to the capital restructuring, the assembly approved the financial statements and the Board of Directors’ report for the 2025 fiscal year.
Shareholders also authorized the board to distribute interim dividends on a semi-annual or quarterly basis for the 2026 fiscal year.
Ibrahim Ahmed Al-Bassam & Co. was appointed as the external auditor for the 2026 fiscal year and the first quarter (Q1) of 2027, with fees set at SAR 400,000.
Furthermore, the assembly declined to grant the Board of Directors the general authorization to license these transactions under the Companies Law. In response to these rejections, the company has been granted a six-month grace period to take corrective measures and ensure these arrangements comply with relevant laws and regulations.
The assembly concluded by approving several internal governance frameworks, including updated policies for conflict of interest, competition standards, and the work charters for both the Audit Committee and the Remuneration and Nominations Committee.
