The Nigerian Stock Exchange (NSE) has fined 31 quoted companies the sum of N424.9 million for failure to file their financial statements after the regulatory due date in 2017.
Checks by LEADERSHIP showed that some of the companies were sanctioned for their inability to meet the regulatory requirements ranging between fourth quarter ended December 31, 2014 and third quarter of 2017. A cursory look showed that 10 insurance are fined a total of N210.4 million, which is about 49.52 per cent of the total amount fined by the NSE during the period under review.
The erring firms are African Alliance, Equity Assurance, Guinea Insurance, Sovereign Trust Insurance, Great Nigeria Insurance, Niger Insurance, Royal Insurance, Standard Alliance Insurance, AG Leventis, Afromedia, Austin Laz & Co., Capital Hotel, Conoil, CWG, Daar Communications, Dangote Flour Mills, Diamond Bank, Fidelity Bank, Fortis Microfinance Bank and Newrest ASL.
Others are Nigerian Enamelware, Pharma-Deko, Premier Paints, Presco, Staco, Standard Alliance Insurance, Thomas Wyatt, Union Diagnostic and Clinical Services Unity Bank and Universal Insurance. By its listing regulation, companies listed on the NSE are expected to file yearly and quarterly financial reports, 45 days and 30 days after the end of each quarter, respectively.
A breakdown of X-Compliance report on the stock exchange website showed that for failing to file its first, second and third quarter 2016, Guinea Insurance Plc was fined N6.9 million, N11.6 million for failing to file 2016 audited report, while it was fined N3.8 million for failing to file its audited 2015 financial report on time.
Similarly, Great Nigeria Insurance was fined N5.3 million for defaulting in filing its 2015 financial report on time and N24.8 million for defaulting in filing 2016 audited result and 2017 first quarter result, while African Alliance Insurance was fined N46 million between December 2014 and first quarter 2017 for the same default.
Equity Assurance got N11 million fine for default filing of its 2016 audited result. Fortis Microfinance Bank, on other hand, got N19.8 million fine for failing to file its 2016 financial report as at when due. Other defaulting companies include AG Leventis, N2.9 million; Afromedia, N200,000; Austin Laz & Co. Plc, N5.4 million; Capital Hotel, N2.1 million.
The rest are: Capital Oil will pay N1.1 million; Conoil, N13.5 million; CWG, N2.1 million; Daar Communications, N18.3 million; Dangote Flour Mills, N500,000; Diamond Bank, N2.4 million; Fidelity Bank, N700,000; Newrest ASL, N2.5 million; Nigerian Enamelware, N900,000.
Others are: Pharma-Deko, N1.6 million; Premier Paints, N11.2 million; Presco, N1.5 million; Staco, N7.5 million; Standard Alliance Insurance, N8.2 million; Royal Exchange, N7.3 million; Thomas Wyatt, N46.8 million; Union Diagnostic and Clinical Services, N3.9 million; Unity Bank, N500,000; and Universal Insurance N51.4 million.
The Exchange in its X-Compliance report explained that the initiative was designed to maintain market integrity and protect the investors by providing compliance-related information on all listed companies.
The report stated, “Companies that are listed on the Exchange are required to adhere to high disclosure standards, which are prescribed in Appendix 111 of the Listing Rules. Financial information, which is periodic disclosure and on-going material events disclosure should be released to the Exchange in a timely manner to enable it efficiently perform its function of maintaining an orderly market.”
The NSE in an effort to achieve a world class capital market has reiterated its commitment to maintain zero tolerance posture on dealing member firms and quoted companies on violations of rules and regulations. This on the back of the Exchange’s determination to shift gears to drive innovations centred on increasing global visibility for the Nigerian capital market in the current year.
Chief executive officer of the NSE, Mr. Oscar Onyema, said recently that the Exchange will sustain a zero-tolerance stance on dealing member firms and listed companies’ violations to help boost the confidence in the market.
On the insurance companies, the executive director, regulation of NSE, Ms. Tinuade Awe said that “we have engaged with NAICOM as well as the insurance companies since 2013 because we do realise we have a compliance problem if we are going to look at the sector on its own and find out the best way to deal with the problem.
“We have a number of things that the engagement has shown and we have been working out with the insurance companies to see whether they can overcome some of the issues. There are issues such as the multiplicity of the types of companies under one umbrella in an insurance company or an insurance holdings company and which of them is listed on NSE.
“Sometime it is one or two in the Group that are listed on NSE and the others are not, we are ensuring that we collaborate with NAICOM to see whether the results of the listed entity can come out on time.”
Meanwhile, the rate at which quoted companies are responding to timely submission of results have improved when compared to other years.
Managing director, Crane Securities, Mr. Mike Eze, said the action of the NSE will boost investors’ confidence in the market because it is sending a signal that the NSE’s management understands the need for investors to get companies’ financial reports as at when due.
Eze said sanctions of erring companies are ways, which the Exchange is using to tell the investing public that they really want to revive confidence in the market, saying that investors need to take informed decisions before choosing, which stock to buy.
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