Panelists at the Forum on the Future Transition of Family Businesses to Public Companies at the Jeddah Chamber of Commerce and Industry on Monday night. — SG photoFatima Muhammad Saudi Gazette JEDDAH – A forum held on Monday night called to ease restrictions which prevent family-owned companies from venturing into the Saudi stock market. Family-owned companies in the Kingdom are estimated to be worth approximately SR350 billion, which constitutes over 25 percent of the Kingdom's gross domestic product (GDP). “Out of 5,000 companies in the Kingdom, only 156 are registered in the Saudi Stock Exchange, said Saleh Kamel, Chairman of the Council of Saudi Chambers (CSC) and the Jeddah Chamber of Commerce and Industry (JCCI), at the Forum on the Future Transition of Family Businesses to Public Companies. According to Kamel, family-owned companies fear losing their operations to new partners, which prevents them from registering in the Saudi Stock Exchange. “Family disputes over dividing a company's operations is another factor that affects the advancement of such companies," he said. Kamel said because family-owned companies are usually managed internally, their business decisions are often ill-informed and in many cases, lead to conflicts which can challenge the stability of the company and result in huge economic losses. “Due to these risks, these companies are now trying to diversify their operations and implement plans to overcome any potential breakdowns." CEO of the Saudi Stock Market, Abdullah Al-Suwailmi, stressed the role family-owned companies play in boosting the national economy. “Ever since the start of the money market commission in 2004, registered companies have jumped from 73 to 157. The total market value of these diversified companies is SR1.3 trillion. We promise to keep the Saudi market strong, for both local and international investors," said Al-Suwailmi. Mazin Batarji, Deputy Chairman of the JCCI highlighted the role the chamber plays in enhancing the performance of the private sector with its 60 committees that have over 1,500 members who are businessmen or are interested in economic affairs. “The new generation should plan a better future for their businesses, primarily by choosing qualified management teams, effective investment modules, and competition methods," Batarji said. The forum was held at the JCCI, and was divided into three sessions: The first discussed the experience of family-owned companies in the Kingdom, the second focused on getting family-owned companies to go public on the Saudi Stock Market, while the third session was devoted to the role governance should play in enhancing competition among family-owned companies in the market.
