A recent report by the Real Estate Contributions Committee detailed the liquidation of 100 distressed contributions since the committee began its work ten years ago, These investments were liquidated by selling their properties through direct sales or public auctions held by the committee to sell the land held by these investments, or through settlements with the investment owners to reimburse shareholders and submit financial reports.
The semi-annual report issued by the Real Estate Contributions Committee stated that the committee has completed the disbursement of shareholders“ rights in all the contributions it liquidated by transferring the funds directly to their personal accounts, after updating their information with the banks contracted to open a special account for each contribution. Transfers of shareholder entitlements began for 22 contributions during the first half of 2014, bringing the total number of shareholders who have received transfers since the committee began its work to 21,866, with total entitlements amounting to (4,281,452,036) riyals, which has been disbursed to date, leaving (3,591) shareholders awaiting the update of their information so that their funds and entitlements can be transferred directly.
According to the report, which is issued every six months, the committee was able to sell real estate properties belonging to the real estate investment schemes known as ”Tamoor Al-Mamlakah” and ”Ard Shalala“ through real estate auctions, as well as selling properties in ”Al-Madina Center” and ”Ard Al-Tashlih in Jeddah” properties through direct sales, after the Committee had announced, for a sufficient period, that it was accepting offers from those wishing to purchase these properties directly. The sales generated total proceeds estimated at more than 431.3 million riyals. Thus, the total proceeds from the sale of real estate for liquidated contributions exceeded 5.6 billion riyals.
Since its establishment, the Real Estate Contributions Committee has received 47 million riyals from the Ministry of Finance in implementation of the Cabinet’s decision to allocate funds to be used for the remuneration of committee members and for contracts with staff, committees, consulting firms, andSharia, legal, real estate, and other consultants it engages. The total government subsidies received by the committee during its tenure to date amount to 47 million riyals, of which more than 28.6 million riyals have been disbursed.
The Committee also operates in accordance with the Cabinet’s decision approving the operating mechanism of the Real Estate Contributions Committee, paragraph 8 of which stipulates that the fees and expenses of those engaged by the Committee—whether accounting, legal, or engineering firms—shall not exceed 5 percent of total proceeds from the sale of the contribution, Given that real estate contributions face difficulties for various reasons that differ from one contribution to another—and consequently, the methods of resolution and the costs of those solutions vary significantly—and given the vast variation in the nature of the assets available for sale from one contribution to another—with some contributions being profitable and others unprofitable; and some holdings have assets that can be sold, while others have assets that cannot be sold, either temporarily or permanently, Therefore, the committee concluded that a mechanism should be established to collect and require a portion—or part thereof—of the proceeds from the sale of certain lands within the contributions, depending on the circumstances of each contribution. This amount is separate from the value of the contribution, as it falls outside the rights and revenues of the contribution, This amount is deposited into a revenue account, the disbursement from which is limited to general contributions and all necessary accounting, legal, engineering, consulting, marketing, and other services, without any disbursements being made to the Committee or its employees. Thus, the Committee utilizes private-sector services without passing the cost on to shareholders. The total commission fees received by the Committee from its inception through the first half of 2014 45.9 million riyals, of which approximately 26 million riyals have been disbursed.
During that period, the Real Estate Contributions Committee held 27 meetings chaired by Dr. Tawfiq bin Fawzan Al-Rabiah, Minister of Commerce and Industry and Chairman of the Committee, and attended by committee members representing relevant agencies such as the Ministries of Interior, Finance, Justice, and Municipal and Rural Affairs, andDuring these meetings, the committee discussed 116 issues related to real estate contributions that had been settled, as well as 252 contributions that the committee is still reviewing.
The Economic Newspaper
