Dammam: A Saudi citizen fell into a giant debt trap amounting to SR 26 million following commercial dealings with an Arab expatriate under a tasattur (commercial coverup) arrangement.
The citizen allowed the Arab nations to engage in contracting activities in the city of Dammam using the name of the company owned by the Saudi national.
As per the agreement between the two parties, the expatriate would manage and operate the establishment’s businesses, acting as the owner. The citizen would have received SR 5000 per month to enable the resident to run the activity.
Accordingly, the expatriate started the construction of several projects in the name of the establishment. However, he defaulted on payment of money after the purchase of equipment.
When the competent authorities summoned the Saudi owner following complaints of payment default, he was surprised by the financial claims exceeding SR 26 million against him.
The Ministry of Commerce intervened and referred to the Public Prosecution and subsequently to a court of law.
The Ministry of Commerce has announced deterrent penalties against violators of the new Anti-Commercial Cover-up Law effective from February 25, 2022.
The penalties for tasattur include imprisonment up to two years and a fine of up to SR 1 million.