SAUDI ARABIA Trends and Developments Contributed by: Saud AlRomi, Mostafa Ihab and Saleh Elbadry, Mohammed AlDhabaan & Partners Eversheds Sutherland
Whistleblower and Witness Protection The Protection of Whistleblowers, Witnesses, Experts, and Victims Law (the “Whistleblower Law”) was enact - ed on 18 February 2024 and came into effect on 29 June 2024. The Whistleblower Law establishes a dedicated pro - tection programme within the public prosecution. The programme provides identity concealment, workplace relocation, secure transportation and escorts, psycho - logical and legal assistance, and the ability to give testimony remotely with voice and image alteration. The Whistleblower Law creates a tiered set of criminal penalties for those who retaliate or interfere. Under Article 24, disclosing the identity of a protected person carries up to one year’s imprisonment and/or a fine of up to SAR200,000. Under Article 25, using force or violence against a protected person to prevent them from telling the truth carries up to three years’ impris - onment and/or a fine of up to SAR500,000. Under Article 26, threatening, blackmailing or offering a ben - efit to a protected person to prevent them from telling the truth carries up to two years’ imprisonment and/ or a fine of up to SAR300,000; obstructing or refusing to provide protection when required by law carries up to one year’s imprisonment and/or a fine of up to SAR200,000. Where such acts are committed by pub - lic officials, they are classified as corruption crimes under the law. Article 17 of the Anti-Bribery Law separately provides a financial reward to informants. Any person – who is not a briber, accomplice or intermediary – whose information leads to a bribery offence being proved receives a reward of not less than SAR5,000 and not more than half the value of confiscated funds. The two mechanisms operate together: the Whistle - blower Law addresses the personal risk of reporting, while Article 17 of the Anti-Bribery Law provides a direct financial reason to do so. In corporate fraud cases, the person most likely to be aware of miscon - duct is an employee, auditor or business partner who previously had no protection and no financial incentive to report. Both factors have now been addressed.
framework of criminal and civil liability for corporate insiders who commit fraud. Under Article 260 of the Companies Law, manag - ers, officers, board members, auditors and liquida - tors who intentionally falsify financial statements or misuse company funds or authority for personal gain face up to three years’ imprisonment and/or fines of up to SAR5 million. The same provision applies to liq - uidators who improperly favour particular creditors. Under Article 261, an auditor who discovers suspect - ed criminal violations during their work and fails to notify management faces up to one year’s imprison - ment and/or a fine of up to SAR1 million. Article 263 doubles all penalties under Articles 260 and 261 for repeat offenders, defined as any person who commits the same offence within three years of a final judgment for a prior offence. Under Article 264, the court may additionally ban a convicted person from member - ship of the board of directors of a joint-stock company listed in the capital market. Article 265 designates the public prosecution as the authority with jurisdiction to investigate and prosecute offences under Articles 260 and 261. Article 269 confirms that criminal penalties under the Companies Law do not affect the right of any person to seek civil compensation for the same conduct. On the civil side, Article 28 makes managers and board members jointly and severally liable for damage caused by wrongful acts or omissions, without requir - ing a criminal conviction. Article 102 gives minority shareholders in joint-stock companies a direct route to trigger judicial oversight: a shareholder represent - ing at least 5% of a company’s capital may petition the competent judicial authority to inspect the company where the conduct of board members or the auditor raises suspicion; the judicial authority may, where it finds the complaint valid, remove board members and appoint qualified supervisors. Criminal and civil claims against the same individuals can be pursued simultaneously under the Companies Law, and the criminal track does not extinguish or displace the civil compensation claim.
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