Markets

Qatari company seeks $43m over ‘systematic defamation’

September 27, 2023, 9:51 AM

A trader at the Qatar Stock Exchange. The Gulf nation has not issued any Eurobonds since early 2020

Mekdam Holding Group files civil lawsuit
Allegations made ahead of 2021 listing
Man jailed for making false claims

A Qatari company has filed a civil lawsuit seeking more than QR157 million ($43.1 million) for defamation in the run-up to its stock market listing.

Mekdam Holding Group, which has interests in technology, engineering, procurement and construction, oil and gas, and logistics, said its compensation claim had been filed with the country’s Investment and Trade Court.

In a filing to the Qatar Stock Exchange on Monday, the company said it had been the subject of a “systematic defamation campaign through social media” before its listing in August 2021.

“This campaign targeted a wide range of stakeholders in the company, including customers, suppliers, shareholders and regulatory bodies,” Mekdam added. The aim was “negatively influencing financial transactions on the company’s shares” and “thwarting the listing process”.

False claims about the business were made on YouTube, Facebook and X (formerly Twitter), as well as blog posts and in letters to prominent individuals.

In an earlier criminal trial, Ahmed Khaled Mohammed Ali Al Thani was convicted of making the claims. He was sentenced to one year in prison and fined QR5 million, under Qatar’s laws on regulation of financial markets, publishing and cyber-crime.

Prosecutors appealed against the ruling, which was issued in March this year, asking for a tougher sentence.

On September 19 Qatar’s highest tribunal, the Court of Cassation, decided against the appeal – prompting Mekdam to launch its civil suit “to protect the shareholders’ rights”.

It is seeking QR107.5 million from Ahmed Khaled Mohammed Ali Al Thani for losses incurred between August and December 2021, as well as compensation of QR50 million for “material and moral damages and for loss to the company and shareholders”.

The defendant’s response to the civil claim has not been recorded.

In the first half of 2023, Mekdam posted net profit of QR15.7 million on revenue of QR245.4 million. Although net profit increased by 7 percent, the company said growth had been stymied by the sharp rise in interest rates.

The company has also signed new contracts worth QR652 million, taking its pipeline of work to more than QR2.6 billion. It has previously provided technology services to Qatar Petroleum, the National Museum of Qatar and Villaggio Mall in Doha.

Earlier this year, Mekdam transferred the listing of shares from the venture market to the main market and saw its shareholder base rise to about 650.

The founders offered about 34 percent of the group’s capital through the listing. It plans to float 50 percent by the end of 2023.