Raysut Cement faces court over ‘misrepresentation’

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• Raysut is Oman’s biggest cement producer
• Investigation into Q3 2022 accounts
• Board dissolved and trading suspended last year

An Omani investigation into a “material misrepresentation” in the accounts of Raysut Cement Company is set to go to court.

The probe by financial regulator, the Capital Market Authority, related to the company’s unaudited financial reports for the third quarter of 2022.

In a filing to the Muscat Securities Exchange, Hamdan Al Shaqsy, chairman of Raysut, Oman’s biggest cement producer, assured shareholders that steps had been taken to “avoid recurrence of such events”.

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The investigation led to the suspension of trading and the dissolution of the board of directors last December.

A temporary board was appointed, headed by Al Shaqsi, and tasked with regulating and restructuring the company to ensure its stability and “deal with the causes that led the company to such situation”.  

On Monday, Al Shaqsy said it had been informed by the Capital Market Authority that the criminal complaint was being transferred to the competent court by the public prosecution.

He added that Raysut Cement has “given full cooperation to the public prosecution” during the investigation.

“We would like to assure shareholders that sufficient provisions for the financial impact have already been made in the books of accounts and significant efforts have been made by the company to further strengthen internal controls in order to avoid recurrence of such events,” he said in the bourse statement.

Raysut Cement reported a reduction in losses for the first half of 2023 after posting a loss of OR1.7 million ($4.4 million), compared with a loss of OR5.3 million in the same period last year.

In an update to its shareholders, the company said the management team is finalising a turnaround plan that is likely to include a capital injection, to be voted on by shareholders at the next extraordinary general meeting.

Al Shaqsy said that business operations were running normally, adding: “Turnaround efforts are progressing extremely well.”

Raysut Cement’s main production facility is located in Salalah. It supplies cement to domestic and export markets including Yemen, Somalia, Mauritius, Qatar, Iraq, Tanzania and Sudan.

According to the World Cement Association, the company has a total annual production capacity of 7.1 million tonnes. 

Cement producers in the Middle East are expected to have a good year in 2023 thanks to the region’s pipeline of mega-projects.

Business consultancy IA Cement said the Middle East and India were “relative bright spots” for the industry this year.