Warba Bank - Delay in Founding General Meeting to February 2010 - Rationale and Consequences

AlQabas reports that the KIA has decided to postpone the founding general meeting of Warba until February 2010 for a variety of reasons.

1. First, apparently all the requirements for the general meeting and agenda are not yet decided or completed.   The most important of these include the final announcement of the establishment of the bank though a decision of the founding shareholders, appointment of the board of directors, appointment of (financial) auditors as well as Shari'ah supervision committee, delegation of authority to the board to issue fractional shares resulting from the allotment of shares.
   
2. Second, the delay to February 2010 will mean that WB will not have a full 12 month fiscal year in 2010.  Therefore, that it will not be eligible to be listed on the KSE until 2012. since  a new listee must have at least one profitable fiscal year. During this almost two year period, it's expected  that the stock market will recover and the price of the shares will trade at an appropriate level.  Not being listed will also mean that the shares cannot be easily traded, thus, forcing Kuwaiti citizens to hold on to their allocated shares.
   
3. Third, the additional period will allow the new management time to establish the bank -- it will take several long months just to properly set up  the internal organization of the bank.  And as well to  establish a solid track record in line with a boost from the anticipated improvement in the economy the economy.