Account Filing Default: 12 Listed Firms Pay N122.1m Fines

Nigerian Exchange Limited (NGX) has fined 12 listed companies N122.1 million for their failure to file audited and interim financial statements after the regulatory due date

An investigation by LEADERSHIP showed that the companies were sanctioned for their inability to meet regulatory requirements for the year-end 2023 and quarterly 2024 financials.

The companies are: Secure Electronic Technology, Conoil, VFD Group, FBN Holdings (FBNH), Sterling Financial Holdings Company, UPDC, ABC Transport, Presco, eTranzact International, NCR Nigeria, Africa Alliance Insurance and PZ Cussons Nigeria.

Further analysis showed that Secure Electronic Technology was fined N11.2 million in audited 2023 and N7.9 million in Q1, 2024. Conoil was fined N15.9 for 2023 year-end and Q1, 2024, while VFD Group and FBNH to pay N8.1 million each sanction.

Sterling Financial Holdings Company got N8.9 million sanction, while UPDC was fined N4.7 million, ABC Transport (N3.2 million), Presco (N3.2 million), eTranzact International (N700,000) NCR Nigeria (200,000), African Alliance Insurance (N46 million), while PZ Cussons Nigeria (N4 million).
According to the NGX’s post-listing rules, quoted companies are required to submit their audited results, not later than 90 calendar days, or three months, after the expiration of the period. The rules also require quoted companies to submit interim reports not later than 30 calendar days after the end of the relevant period.

The Exchange said that the initiative was designed to maintain market integrity and protect the investors by providing compliance-related information on all listed companies.

It added that, “companies that are listed on the Exchange are required to adhere to high disclosure standards. 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 NGX, in an effort to achieve a world class capital market, reiterated its commitment to maintain a zero tolerance posture on dealing with member firms and quoted companies on violations of rules and regulations.

Market operators agreed that “the sanction for non-compliance with the rules of listing on NGX is a welcome development, as it will lead to more appropriate pricing of securities.
More quoted entities would be compelled to give information to the market on a timely basis.”

The managing director, Crane Securities Limited, Mike Eze, while reacting to the development of an inquiry by Nairametrics, said the action of NGX would boost investor confidence in the market because it sends a signal that investors will get companies’ financial reports as at when due.

He noted that investors need to make informed decisions before choosing which stock to buy and this can only be achieved if there is adherence to good corporate governance by the quoted companies.

The vice-chairman of Highcap Securities, David Adonri, said the fines were necessary to maintain the sanctity of the market, noting that, “A lot of them relate to corporate disclosures. The capital market is information-driven. There is certain information that the listed companies must disclose at the appropriate time. If a company realised that it may not be able to disclose such information, the company can send a request to the exchange requesting additional time.”

Also, the president of Progressive Shareholders Association of Nigeria(PSAN), Boniface Okezie said, it is better for Nigerians to have a few companies that are ready to play by the rules than to have all the companies in the world that are not ready to satisfy post-listing requirements.

Okezie said, penalising companies for non-compliance with the rules of listing on NGX is a welcome development, as it will lead to more appropriate pricing of securities.

He said, more entities would be compelled to give information to the market on a timely basis, adding that investor confidence in the regulatory capacity of NGX and the market would be enhanced.