Saudi Darb Wins SAR 69.7 Million Compensation Ruling Against Former Board Members

Saudi Darb's Legal Victory Over Former Board Members

Saudi Darb Investment Co., formerly known as Al-Baha Investment, has received a favorable preliminary ruling from the Committee for the Resolution of Securities Disputes (CRSD). This ruling mandates that former board members pay approximately SAR 68.7 million in compensation, along with SAR 500,000 for legal fees. The decision, however, is not final and remains open to appeal for 30 days.

Background of the Dispute

The ruling originates from a complex legal dispute tied to a contract for the sale of company assets, which Saudi Darb claims was mishandled during the tenure of the former board from February 10, 2010, to February 9, 2013. In May 2025, Saudi Darb filed a complaint with the Capital Market Authority, alleging that the former board’s actions resulted in financial losses.

Details of the Asset Sale

The contested transaction involved a contract signed by the former board to acquire assets including a crusher and a cement project for a total of SAR 86 million from Al-Sateaa Modern Contracting Co. The payment structure included an upfront cash payment of SAR 10 million, supplemented by a waiver of Saudi Darb's assets for the remainder.

The in-kind payments were notably significant, including:

• Land in Taif: 50% of the land price for the Al Murooj project, which spans over 114,000 square meters.
• Poultry Project: A substantial 993,000 square meter land plot associated with a poultry project located west of Al Aqiq Governorate Airport.
• Educational Shares: Ownership shares held in Al Baha Private College Co., estimated to be worth SAR 18 million.

Saudi Darb originally sought a total of SAR 100 million in compensation, in addition to attorney fees, but a portion of the claims was dismissed in this recent ruling.

Implications of the Ruling

This preliminary ruling could have significant financial repercussions for the company, which will formally disclose the effects once the ruling is finalized. The outcome highlights the importance of corporate governance and accountability within Saudi companies, setting a precedent for future disputes involving board conduct.