Local contractor Mohammad al-Mojil Group (MMG) is facing “unusual operational issues” due to court directives which have barred the movement of the company’s equipment and has authorised the auction of the machinery.

The courts in Saudi Arabia have issued two separate directives. The first was issued to the police department in November 2016, which restricts the movement of MMG’s equipment from its premises, the company said in a statement to Saudi Stock Exchange (Tadawul).

The second directive allows a company, to prepare for the auction of the MMG’s assets and equipment which according to company records are about 21 per cent of its fixed assets.

Neither of the court directives were officially communicated to the company and were shown to the MMG representatives at the police department when approached for clarification. The company said it has not been to obtain the copies of the directives despite requests to competent authorities.

MMG in November had written a letter to the kingdom’s Deputy Crown Prince Mohammed bin Salman al-Saud, expressing fears that it may not be able to continue operations amid its financial and legal difficulties.

The letter to the Deputy Crown Prince has highlighted the difficulties posed by the lenders and the government, and legal restrictions that are hampering the board from performing its job, MMG said in a statement at that time without elaborating further.

It was not clear what sort of help MMG had sought from the all-powerful prince, who heads the kingdom’s Council of Economic and Development Affairs (CEDA), the body responsible for Riyadh’s agenda of transforming its hydrocarbon-dependent economy and plans to boost investments and develop alternative revenue lines.

MMG’s shares have not traded on the bourse since July 2012, after the regulator suspended the stock over incurred losses.

It is trying to restructure its debts amid an economic slowdown and government spending cuts on the back of lower oil prices. The company, which has slashed the number of employees to 3,000, from 25,000, claims it has yet to receive hundreds of millions of riyals for the work it has already completed.

The legal troubles deepened after the Saudi Arabia’s market regulator fined and handed down five-year jail sentences to founder Mohammad Al-Mojil and his son Adel al-Mojil, the firm’s chairman.

The Capital Market Authority’s (CMA) Committee for the Resolution of Securities Disputes (CRSD), which judges securities cases in the kingdom, in June fined MMG SR1.6bn ($427m) and recommended sentences for breaching rules relating to accumulated losses.