Saudi Capital Market Authority accepts class action against Hamel Al Musk, opens 90-day opt-in

The Capital Market Authority has announced that the Committee for the Resolution of Securities Disputes has approved a request to register a class action lawsuit filed by an investor against Hamel Al Musk Holding for Business Services, over the company’s public share offering without following regulatory procedures and in violation of Article 31 of the Capital Market Law.

According to decision No. 33/L/D1/J/2026, issued on 6 Muharram 1448 AH (June 21, 2026), any individual who subscribed to the company’s shares may apply to join the class action within 90 days of the announcement, via the Authority’s website. This is based on Article 57 of the Procedures for Resolution of Securities Disputes, and the committee will review applications in accordance with legal procedures.

Request seeks to void subscriptions and refund investors

According to the General Secretariat of the Committees for the Resolution of Securities Disputes, the lawsuit not only seeks to prove the violation but also requests the annulment of the subscription agreement and obliges the defendant to return the funds paid. This claim has not yet been ruled on; the current decision is limited to accepting the registration of the lawsuit and opening the window for others to join.

How can affected investors join? What are the conditions?

Frequently asked questions from the Authority clarify that anyone who subscribed to Hamel Al Musk Holding for Business Services is eligible to join. Applications are submitted through the Investor Protection Portal on the Authority’s website and are handled by the Investor Protection Department. If the conditions outlined in the committee’s decision are met, the Authority will refer the application directly to the Committee for the Resolution of Securities Disputes.

The committee will approve the class action once at least ten applications sharing the same legal grounds, facts, and claims are received within ninety days from the announcement date, unless the committee extends the period, which cannot exceed 180 days from the announcement.

Decision is final; similar individual cases to be suspended and merged

The Authority clarified that submitting a request to join constitutes acceptance of its terms. Whether a decision is issued depends on the applicant meeting eligibility criteria, with updates provided via SMS and email.

The committee’s decision to accept the class action registration is final and cannot be appealed. Individual lawsuits before the committee that are identical in legal grounds, facts, and claims will be suspended and merged with the class action. Those whose cases are suspended and merged have the right to withdraw within 30 days of the suspension decision.

Those who do not meet the conditions to join may file an individual lawsuit or request to register another class action, provided they have previously submitted a complaint to the Authority and 90 days have passed, or the Authority notifies them that they may file before that period ends.

Settlement remains possible, subject to fairness

The lead plaintiff—who represents the group before the committee—and the defendant company may reach a settlement agreement to resolve the class action. The committee will only approve the settlement if it deems it fair to all group members, taking their views into account.

Each member may withdraw from the settlement in writing within 30 days of being notified of the approval, without forfeiting the right to pursue an individual claim. Members may also withdraw from the class action in general, but after the defendant presents its defense, neither the lead plaintiff nor any member may withdraw without the defendant’s consent.

Why a class action?

According to the Authority, the class action mechanism is designed to streamline litigation when many individuals are affected by the same legal and factual issues, sparing claimants the burden of following up and attending hearings, reducing the time needed to resolve investor compensation cases, and lowering litigation costs. This aligns with international best practices, enhances the appeal of the Saudi capital market, and reduces investment risks.

The Capital Market Authority reiterated its commitment to protecting investors and enforcing the Capital Market Law and its implementing regulations to ensure fairness, efficiency, and transparency in securities transactions. The Authority stressed that protecting investors from unfair, improper, fraudulent, or manipulative practices is a top priority, ensuring that those harmed receive compensation as quickly and efficiently as possible.