• Chapter 3 Chapter 3 Control

    • Article (52) Notification of Control

      (a) The Central Bank shall issue a regulation specifying the nature and limits of "control" and the regulations applicable in case of approving a control over a licencee or a listed company.
      (b) The Central Bank must be notified in any of the following cases:
      1. If effective Control over a Licencee takes place indirectly whether by way of inheritance or otherwise.
      2. Gaining control directly as a result of any action leading to it.
      3. The intention to take any of the actions that would lead to control.
      The controller or the person intending to take control over the Licencee, as the case may be and by the Licencee itself if it is aware of such case, shall in any of the above-mentioned cases, make notification.
      (c) Notice of Control shall contain a request for the Central Bank's approval for taking control over a licencee or taking any action that may lead to control, and shall also contain such particulars and information and be accompanied by such documents as the Central Bank may specify. In the cases referred to in items 1 and 2 of the preceding paragraph, the notice shall be made within fifteen days from the date of control. In the case referred to in item 3 of the preceding paragraph, the notice shall be made before taking any of the actions that would lead to control.

    • Article (53) Control Procedures

      (a) The Central Bank must, within three months from the date of receipt of the notice referred to in Article 52, notify the controller or the person intending to take control over a Licencee, as the case may be, of its approval of control, any of the actions which would lead to a control, or the refusal thereof as the Central Bank may determine at its own discretion.
      (b) The Central Bank may impose any restrictions that it considers necessary to be observed in case of its approval of a control or any of the actions that would lead to a control.
      (c) If the period specified in paragraph (a) of this Article lapses without a decision being taken on the application seeking approval of a control or any intended actions that would lead to a control, the application shall be considered as accepted.
      (d) The controller or the person intending to take control over a Licencee may, within thirty days of the notification, appeal against the Central Bank's decision to refuse the control or any conditions imposed in respect of such control.

      The Central Bank shall decide on the appeal and notify the Licencee of its decision within thirty days from the date of submitting the appeal.
      (e) An appeal against a decision on control may be submitted within thirty days from the date when the concerned person was aware of such decision.

    • Article (54) Period of Control

      An approval of a control shall be temporary and shall take effect from any of the following periods:

      (1) The period specified in the notice sent by the Central Bank to the controller regarding the approval of control.
      (2) A period of one year, commencing from the date of notice sent to the controller in approval of control unless the said notice includes specific a period for the control.
      (3) A period of one year, commencing from the date of the implicit approval to control, or the intended action which would lead to a control, in accordance with the provisions of paragraph (c) of Article (53) of this law.

    • Article (55) Refusal of Control

      The Central Bank may refuse to give approval to a control if it will affect the legitimate interests of the customers or if it is detrimental to the relevant sector, or if the Central Bank decides, according to its own discretion, that it would be inappropriate to control a licencee according to the criteria set by the Central Bank.

    • Article (56) Effect of Acquiring Shares in Breach of Control Provisions

      (a) Any person who acquires shares in breach of the provisions of this chapter shall carry out any instructions issued to him by the Central Bank to transfer such shares or refrain from exercising voting rights in respect of such shares according to the procedures prescribed in such instructions.
      (b) The Central Bank may seek a court order to take appropriate precautionary measures or sell such shares if the Licencee fails to carry out the order referred to in the preceding paragraph. The value of the shares sold shall be paid to the party who has rights therein after the deduction of expenses.

    • Article (57) Restrictions on Activities

      (a) A Licencee incorporated in the Kingdom shall not practice any of the following without a prior written approval of the Central Bank:
      1. Merge, amalgamate or enter into a partnership with any person outside the Kingdom, except in the ordinary course of business.
      2. Transfer all or a major part of its assets or liabilities inside or outside the Kingdom, without prejudice to the provisions of Chapter 6 of this law.
      3. Make any modification to its issued or paid-up share capital.
      4. Modify its Memorandum or Articles of Association.
      5. Engage in major acquisition or investment operations as determined by the Central Bank.
      (b) The Central Bank, in granting any approval under the preceding paragraph, may impose such conditions as it considers appropriate.
      (d) The Council shall set out rules and procedures regulating the acquisition of licenced national entities by others in accordance with the provisions of this Law.

    • Article (58) Reporting of Matters Influencing the Licencee's Financial Position

      The Licencee shall notify the Central Bank immediately of any matter that may affect its financial position, currently or in the future, or limit its ability to meet its obligations.