The Nigerian Stock Exchange (NSE) has fined 12 quoted companies N49.1 million for failure to file their audited financial statements 2017 after the regulatory due date.
This was made known at the latest released NSE x-compliance report. X-Compliance is a transparency initiative of the Exchange, which is designed to maintain market integrity and protect the investors by providing compliance related information on all listed companies.
The companies include Academy Press with the highest sanction of N35 million. Fidelity Bank followed with a sanction fine of N2.7 million, while FBN Holdings, Meyer and Sovereign Trust Insurance to pay N2.1 million each for audited result, 2017.
Presco will pay N1 million fine for failing to submit its audited report within the deadline and another N300,000 for failing to submit its first quarter results for 2018. Sterling will pay N1.3 million fine for the delay of its 2017 audited financial statements.
The Exchange also imposed sanctions on Vitafoam Nigeria and Wema Bank of N800,000 each, Abbey Mortgage Bank will pay N700,000, while International Breweries and FCMB Groups to pay N100,000.
Post-listing rules at the NSE require quoted companies to submit their audited earnings reports, not later than three months or 90 calendar days after the expiration of the period. The deadline for submission of annual report for companies with Gregorian calendar business year ended December 31, 2017 was March 31.
Under the rules at the Exchange, a late submission attracts a fine of N100,000 per day for the first 90 calendar days of non-compliance, another N200,000 per day for the next 90 calendar days and a fine of N400,000 per day thereafter until the date of submission.
The Exchange, in its X-Compliance report, explained that the initiative was designed to maintain market integrity and protect 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, had reiterated its commitment to maintaining zero tolerance posture on dealing member firms and quoted companies on violations of rules and regulations. This is on the back of the exchange’s determination to shift gears to drive innovations cantered on increasing global visibility for the Nigerian capital market in the current year.
Chief executive officer of 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 confidence in the market.
Managing director of HighCap Securities, Mr. David Adonri 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 and when due.
Meanwhile, Diamond Bank, Staco Insurance, Union Bank, Veritas Capital Assurance and Standard Alliance, that failed to submit their first quarter reports for the period ended March 31, 2018 have in their various disclosures gave different reasons for the delays in the submission to the Nigerian Stock Exchange (NSE).
The NSE deadline for first quarter result ended March 31 is April 30th. Diamond Bank, stated that it was unable to issue its 2018 first quarter unaudited (UFS) within the deadline of April 30, 2018 as stipulated by Nigerian Stock Exchange rules. The bank said: “As pointed out in our notification to the exchange dated May 2, 2018, we have been unable to file our 2017 Audited Financial Statements (AFS), which is still in their approval process and should precede filing of 2018 First Quarter UFS.
“We believe that the approval of 2017 AFS will be concluded within May 2018 and shall be filed alongside first quarter 2018 UFS on or before May 31, 2018.’’
Union Bank explained that the delay was due to the ongoing finalization of our 2017 audited financial statements with regulators and our external auditors, saying it is anticipated that this process will be concluded before May 15,2018.
Also, Staco Insurance said it was unable to submit its 2018 first quarter management account to the NSE within the stipulated deadline of April 30, 2018.
It said that the conclusion of the results for the period ended March 31, 2018 is highly dependent on the finalization of the 2017 audited account, which at the moment is being concluded.
According to NSE, every listed company is required to provide the Exchange with timely information to enable it efficiently perform its function of maintaining an orderly market.
“In accordance with the provisions of Appendix iii of the Listing Rules, quoted companies are required to obtain prior written approval from The Exchange before publications that affect shareholders’ interest are made in the media. In addition, companies are also required to disclose material information to The Exchange and publish some of that information in their Annual Reports.”