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Saudi, Turkish Companies Ink Agreement and 2 MoUs to Localize Drone Industry

Saudi companies specialized in military and defense industries and Turkish defense companies have signed an agreement and 2 memorandums of understanding (MoUs). SPA
Saudi companies specialized in military and defense industries and Turkish defense companies have signed an agreement and 2 memorandums of understanding (MoUs). SPA
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Saudi, Turkish Companies Ink Agreement and 2 MoUs to Localize Drone Industry

Saudi companies specialized in military and defense industries and Turkish defense companies have signed an agreement and 2 memorandums of understanding (MoUs). SPA
Saudi companies specialized in military and defense industries and Turkish defense companies have signed an agreement and 2 memorandums of understanding (MoUs). SPA

Several Saudi companies specialized in military and defense industries and Turkish defense companies have signed an agreement and two memorandums of understanding (MoUs) to localize the drone industry and its component systems within the Kingdom.

Sunday’s signing ceremony in Riyadh was under the patronage of Saudi Minister of Defense Prince Khalid bin Salman bin Abdulaziz.

The agreement and MoUs are an extension of the two acquisition contracts signed by the Saudi Defense Ministry two weeks ago with Turkish defense company "Baykar" to raise the readiness of the armed forces and enhance the Kingdom's defense and manufacturing capabilities.

During the ceremony held on this occasion, the Saudi Arabian Military Industries (SAMI) signed a localization agreement with Baykar.

The agreement focuses on the manufacturing of electronic systems, mechanical components, and drone structures using composite materials, as well as encompassing manufacturing, final aviation testing, and the provision of training and support services.

The CEO of SAMI, Eng. Waleed bin Abdulmajeed Abu Khaled, and the CEO of Baykar, Haluk Bayraktar, signed the localization agreement.

Moreover, the Saudi National Company for Mechanical Systems (NCMS) signed a MoU with Roketsan and Aselsan, two leading Turkish defense companies, to localize the production of ammunition and optical sensors for drones in the Kingdom.

Representing the Saudi side, the CEO of the MCMS, Eng Ali Abdulla Alashban, signed the MoU while the CEOs of the Turkish companies Aselsan and Roketsan, Ahmet Akyol and Murat Ikinci, respectively, signed on behalf of their companies.

Assistant Minister of Defense for Executive Affairs Dr. Khalid bin Hussein Al-Bayari expressed his gratitude for the gracious patronage of the Minister of Defense, emphasizing the wise leadership's keen interest and support in localizing military industries and enhancing manufacturing and defense capabilities in the Kingdom.

The Assistant Minister stressed that the localization agreement and the MoUs reflect the concerted efforts of the Ministry of Defense, in coordination with the General Authority for Military Industries (GAMI) as the legislative authority for the military industry sector, and the General Authority for Defense Development (GADD), responsible for defining research, development, and innovation objectives in technology and defense systems.

This achievement aligns with Saudi Vision 2030's target of localizing more than 50% of total military spending, he clarified.

Dr. Khalid indicated that they would also significantly contribute to the development of localization capabilities within the Kingdom through technology transfer, knowledge sharing, and training of Saudi personnel. This will not only strengthen local capabilities but also create valuable employment opportunities for the Saudi youth, he noted.

During the ceremony, the CEO of SAMI highlighted that the signing of the agreement and MoUs reaffirms the strong support and interest of the wise leadership in localizing the defense industries sector and advancing the goals of Saudi Vision 2030.

Additionally, Eng. Waleed emphasized that the localization agreement represents a major milestone for SAMI, positioning the company among the top 25 companies in this sector globally.

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Mandatory Insurance for Board Members of Saudi Financial Institutions Against Failures

Employees at the Saudi Investment Bank. (Saudi Investment Bank)
Employees at the Saudi Investment Bank. (Saudi Investment Bank)
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Mandatory Insurance for Board Members of Saudi Financial Institutions Against Failures

Employees at the Saudi Investment Bank. (Saudi Investment Bank)
Employees at the Saudi Investment Bank. (Saudi Investment Bank)

Asharq Al-Awsat learned that the Saudi Central Bank (SAMA) is taking steps to require financial institutions that are listed on the Saudi stock markets—both the main market (TASI) and the parallel market (Nomu)—to provide insurance coverage for their board members against professional errors and failures.

The measure aims to protect board members from potential liabilities while also safeguarding shareholder interests. The move aligns with SAMA’s supervisory and regulatory role in maintaining the stability and growth of the financial sector.

According to information obtained by Asharq Al-Awsat, this insurance offers financial protection, but does not exempt board members from their legal responsibilities or any penalties resulting from regulatory violations.

Directors and Officers (D&O) liability insurance provides coverage for executives, board members, or the company itself against fines, lawsuits, or compensation claims that may arise from their decisions. This applies in cases such as regulatory non-compliance, the issuance of misleading statements, or the dissemination of incorrect information.

Under D&O liability insurance, professional failures include errors, negligence, and the dissemination of inaccurate information due to lapses in professional duties. Financial claims covered under this insurance may include legal costs, fines, and lawsuit settlements.

Last year, the Capital Market Authority (CMA) issued a final ruling against 14 individuals, including board members and employees of Raydan Food Company (formerly Raydan Kitchens & Restaurants), for violating Article 49(a) and Article 50(a) of the Capital Market Law, as well as Article 6(a) of the Market Conduct Regulations. They were ordered to pay over SAR 77 million ($20.56 million) in avoided losses and fined SAR 50.6 million ($13.4 million).

The ruling implicated the chairman, vice chairman, managing director, and six other board members—including the head of the audit committee and two committee members—under Article 49(a) of the Capital Market Law. Additionally, the chairman, vice chairman, managing director, two other board members, and others were found guilty under Article 50(a) of the law, along with Article 6(a) of the Market Conduct Regulations.