Mobily shares resume trading in Saudi Arabia after suspension

Shares of the Saudi telecoms operator Mobily resumed trading yesterday, a day after it was suspended by the market regulator.

The suspension, its second this year, was lifted after Mobily declared that the Capital Market Authority had rejected shareholders’ demand for compensation over the sharp fall in its stock price.

The authority has been investigating Mobily since late last year because of alleged accounting irregularities that led Mobily to restate its earnings. It assigned a special team to look into Mobily’s finances, which raised concerns about its accounting ­methods.


More than US$5 billion has been wiped off Mobily’s market value since last year.

Etisalat, the UAE’s biggest telecoms company, owns 27.5 per cent of Mobily, the kingdom’s second-largest mobile phone company.

“This is another episode in the Mobily story,” said Sanyalak Manibhandu, the head of research at NBAD Securities in Abu Dhabi.

“The company needs to come into new financing arrangements with its lenders and it needs to address its legislation with Zain. We may wait for the third-quarter financial statement to get clarity on these events.”

Mobily and Zain Saudi, an affiliate of Kuwait’s Zain, have been locked in a legal arbitration since late last year. The two operators in 2008 agreed that Mobily would provide Zain with services such as domestic roaming and site sharing. Subsequently, Zain owed Mobily payments in exchange for these services.

Mobily shares were initially suspended from trading on June 8 and resumed trading on August 3.

On November 3 last year, Mobily reported a 71 per cent fall in its third-quarter net profit and restated its profit for the past year-and-a-half before that date. Mobily said there was a timing error in recognising revenue from a promotional campaign.

selgazzar@thenational.ae

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