Riyadh - Mubasher: Herfy Food Services Company (Herfy Food) issued a statement to shareholders on Monday, responding to allegations and rumors targeting the company, according to the statement, including the letter from shareholder Ahmed Al-Saeed.

Herfy Foods said in a statement on the Tadawul website that the shareholder, Ahmed Al-Saeed, claims that there is misleading information in the financial statements, and that he is the most concerned about the interests of the company and its shareholders; which means challenging the current executive management. Accordingly, the company’s management decided, based on paragraph (d) of Article (71) of the Rules for Offering Securities and Continuing Obligations, that there is a need to clarify some facts.

Herfy Foods clarified that what the applicant claims is incorrect in light of the efforts made by the current management to develop the company, apply best practices, and strive to preserve its interests and maintain its financial and administrative stability. It indicated that the applicant’s claim that he is keen on the company’s interests and profitability is not valid in light of the information and facts available to it that prove the opposite of what he claims.

The company revealed in its statement that in the first quarter of 2021, he submitted a copy of an agreement signed by the aforementioned party requesting: a special reward for him of 20 million riyals, the personal transfer of the trademark and branches of Doka showrooms to him, the personal transfer of the buildings of the Sudair factory project to him, his appointment as a technical consultant to the company with a 5-year contract with an annual reward of 3 million riyals paid to him at the beginning of each year, and his request to appoint his son Khaled as CEO and Managing Director of Herfy Company for a period of 3 years starting on May 1, 2021 and ending on April 30, 2024, renewable for a similar period; noting that these requests would have cost the company huge sums for his personal benefit.

Herfy Foods added that the aforementioned shareholder did not release himself and his son Khaled from the company when they left, which resulted in the failure to deliver documents and papers, including deeds for real estate and lands owned by the company, adding that on June 2, 2023, a factory established by the aforementioned, and whose chairman was at the time of the incident, supplied a product specific to Herfy Company, “mayonnaise,” bearing the company’s trademark, and supplied it to restaurants not affiliated with Herfy Company outside the Riyadh region. A report was filed with the Ministry of Commerce, and the case was referred to the Public Prosecution, and the accusation was brought and referred to the competent court.

The company also revealed that he filed a lawsuit in 2022 demanding end-of-service bonuses and leave balance for 40 years, with total claims amounting to 44.87 million riyals, which he lost and a ruling was issued on March 23, 2022, rejecting his lawsuit, noting that the financial statements did not reflect provisions in the amount claimed during that period under his management.

Herfy also indicated that he appointed 14 of his relatives to the company, and on March 24, 2021, a month before his resignation from his position, he amended the rental value of a property he owns in Abha Governorate and leased to Herfy Company from 250,000 riyals to 950,000 riyals annually, despite the fact that the lease contract had 3 years remaining. He also raised the rental value of one of the properties he owns in Riyadh from 200,000 to 350,000 riyals annually, and also amended the rental value of a property he owned in Riyadh in the industrial zone from 180,000 to 290,000 riyals annually without changing the lease term or area, and signed this amendment alone with his son Khaled and without referring to the council or any of its committees; which was rejected by the council and the association and was stated in the annual report for the year 2021.

The company also noted that he had taken advantage of an investment opportunity that the company was aiming to benefit from; since on December 15, 2020, the board approved the company’s strategic plan project, which included a recommendation to acquire an existing brand in the restaurant sector, such as the Kudo restaurant chain, and after submitting his resignation, he submitted an offer to purchase the aforementioned brand, which caused the company to miss out on an investment opportunity, and today social media is circulating that the aforementioned has an interest in Kudo Company.

According to the company’s statement, on March 14, 2021, he directed the company’s employees to terminate the lease contract for a property that was used as a kitchen for Herfy Company, and the company’s management was surprised by this on June 22, 2021; to be re-rented to a competing company owned by the aforementioned’s first-degree relatives who were working for Herfy Company during that period.

Herfy also revealed that on April 8, 2021, he transferred an amount of 43.4 million riyals to his own account from the company’s account and returned it on April 28, 2021, and on April 29, 2021, he transferred an amount of 37.6 million riyals to his own account from the company’s account and returned it on May 6, 2021, in addition to his transfer in 2021 of two vehicles from the company’s ownership to his own ownership without approvals and without compensation to the company.

Herfy Foods confirmed that it did not intend to get involved in these disputes, but in light of the statements and speculations circulating on social media about the company, it is necessary to clarify the facts, take the necessary measures, move forward with the company, and strive to achieve everything that is in its interest and the interest of its shareholders.

To view the company's explanation to shareholders :

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