Saudi shareholders could soon get the power to make struggling listed companies spell out how they will recover, as regulators push for more accountability over mounting losses.
The Capital Market Authority (CMA) proposed the changes on Thursday and opened them to public comment for 30 days.
Under the draft, investors holding at least 5% of a company's voting shares could ask for an item on the general meeting agenda. It would call for a plan to tackle the company's accumulated losses.
Beyond disclosure: Listed companies already have to report when their losses pass set thresholds. The proposals go further. Companies would have to explain how they plan to recover, and show whether it's working.
Most markets make companies call a shareholder meeting when losses wipe out half their capital. Few make them report on the recovery afterwards. Malaysia is one: its struggling listed companies post monthly updates on their rescue plans.
Companies whose accumulated losses reach 50% of capital would also have to name shareholders owning 1% or more. If that's fewer than 20 names, they'd list the top 20 holders instead.
Tracking the fix: If shareholders approve a plan, the company would have 60 days to publish it on Tadawul.
The board would then post monthly or quarterly updates, comparing progress with targets and explaining any misses.
Those updates would continue until accumulated losses fall below 20% of capital.
Why it matters: Several Saudi-listed companies have cut their capital to absorb losses or gone through restructuring.
Shareholders would get a clearer view of whether those moves come with a real turnaround in the business, not just a cleaner balance sheet.
More changes: The draft would also widen the rules on deals with related parties. The audit committee would have to be chaired by an independent member, and nomination committees would have to give reasons when they reject board candidates.
Investors holding 5% could also ask for a general meeting held in person, alongside online voting.
What to watch: Comments close on November 28. The key question is whether the 5% threshold and the progress reports survive into the final rules.
For now, these are proposals, not rules in force.
