Etisalat’s Saudi affiliate Mobily has suspended CEO Khalid Omar Al Kaf after errors were found in the company’s accounting, leading it to restate figures for 2013 and the first nine months of 2014.
Al Kaf’s suspension took effect from November 21 and will continue until the company’s audit committee submits its report to the board of directors.
In the meantime, Serkan Okandan, deputy CEO, will run Mobily’s operations. Okandan was appointed in October, just before the erroneous announcement was made, and he is also CFO of Etisalat, which owns 27.5 per cent of Mobily.
Mobily cut its 2013 profit by $197 million and its first-half 2014 profit was reduced by around $183 million, causing Saudi Arabia’s market regulators to launch an investigation into the matter. It also reported a 71 percent drop in third-quarter profit this year.
In a statement made to the Saudi stock market regulator, Mobily laid the blame on the fact that it had mistaken the timings of revenue recognition related to a customer loyalty programme.
It also had to reassess contracts related to its fibre-to-the-home rollout programme.
While Mobily restated its earnings, Etisalat concluded that the impact of the changes are “immaterial”, accounting for well under 2 per cent of its profit over the period affected. It said it would account for the change in its Q4 numbers.