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Tuesday 15 June 2021
HomeWorldKuwait not out of crisis yet, companies must declare bankruptcy

Kuwait not out of crisis yet, companies must declare bankruptcy

The Chairman of Network Holding Company (NHC), Nayef AlـEnizi has disclosed to Al Watan that he supports the declaration of bankruptcy of certain companies, even though this could happen to the NHC. In an interview with Chairman AlـEnizi, he said to Al Watan that local companies should be sorted out so only strong companies will remain in order to strengthen the market.

He explained that the success of the governmental development plan requires full adherence to transparency, sufficient and reliable research before starting projects, tight monitoring and assigning international and competent consultants to follow the proper implementation of projects and to assess and monitor the performance of companies involved. The financial crisis has worked on uncovering and shedding light on violations committed by some companies, who took advantage of the weak monitoring and little supervision and played around with figure and numbers to benefit personal agendas and create propaganda.

AlـEnizi confirmed that trying to hold individuals and officials in companies accountable for what they had done is not worthy anymore, as efforts should be focused on the upcoming performance of companies and projects so as to avoid making the same mistakes as before. He noted that the government has participated in exaggerating the crisis while at the same time failing to allow the market to benefit from its funds. The government and the Parliament are also blamed for delaying Kuwait”s emergence out of the crisis and for delaying the positive steps towards rescuing the market and minimizing the impact of the financial crisis.

He said, “As the chairman of a company that could possibly declare bankruptcy, I still insist that companies should be sorted out and reـshuffled in order to help the market return to its normal state. I do not deny positive and logical efforts to rescue some companies, but we shouldn”t burden shareholders more than they can handle. Priorityـwise, efforts should be focused rescuing the economy and then recovery. As some international banks had already declared bankruptcy, there is no shame in this in order to avoid causing more losses to shareholders.”

Regarding the issue of holding companies” leaders accountable, he said this will not benefit shareholders, who should focus on dealing with the damages and losses that already happened. We all should learn a lesson and learn from our mistakes by setting new legal standards and regulations to eliminate fraud, he said.

He added that Kuwait”s economy will witness a major shift and expansion in all sectors once the development plan starts being implemented, especially if the plan is executed without benefiting personal interests. The market is striving for liquidation and executing this plan will provide enough cash to revive the market and to pick up momentum in the right direction.

On the issue of seeking assistance of international companies” expertise to execute the development plan, AlـEnizi asserted that local companies should the first to benefit from the plan and main projects to should be executed by Kuwait companies.

“I believe that all statements by government officials have implied this at some point, which means that local companies involved in these projects should reap huge profits to shareholders, which will positively reflect on the local economy in general,” AlـEnizi said.

He added that a specialized monitoring authority should be formed in order to serve as a watchdog and follow up on executing these mega projects. This authority should be able to assess and evaluate companies” performance throughout the process of executing projects, while foreign expertise is needed but should only be involved in management. In the meantime, local companies which give parts of the projects to foreign subـcontractors should be penalized.

On the national economy”s capability to survive the impact made by the crisis, AlـEnizi said that although the local market wasn”t as severely affected as the international economies, Kuwait is not out of the storm just yet.

“The government has recently announced a budget surplus worth billions of dinars and most local companies are not tied up with foreign industrial production. As a consuming country, Kuwait has benefited from the financial crisis and from the decrease in prices imported goods such as cars, which went down almost 40 percent from previous prices,” he said.

&He added that Kuwait”s economy wasn”t affected by the international crisis, but Kuwait Stock Exchange (KSE) is so sensitive and gets affected by the slightest international trends and news. The plunging of the price index and the devaluation of assets worked on revealing many violations committed by the heads of some local companies.

“In addition to the fact that the prices of some companies” shares were so inflated and should come back to their fair prices in the market, some companies went as far as altering figures and numbers in their financial statements before submitting their budgets to the concerned authority. They have succeeded in spreading a fake picture and propaganda to polish their image in the absence of proper monitoring and incompliance with transparency and disclosure standards,” said AlـEnizi.

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