NGX Fines 20 Firms N255.53m For Financial Statements Filing Default

NGX Regulation Limited, a subsidiary of the Nigerian Exchange Group (NGX Group) has fined N255.53 million on 20 listed companies for failing to file their financial statements after the regulatory due date in 2023 and 2024.

The companies were sanctioned during the audited financial year 2023 and first and second quarter of 2024 for their inability to meet the regulatory requirements in the period under review.

As part of the post-listing rules of the NGX, companies quoted on the Exchange are required to file their respective unaudited quarterly and audited yearly financial statements with the NGX a month after the end of each quarter and three months after the end of a financial reporting year.

Companies experiencing any form of challenge that would hinder the submission within the stipulated time frame are required by the post-listing rule to communicate the challenge with the NGX.
Compliance with the rule, according to the NGX, promotes transparency, helps orderliness in the market and ultimately helps investors in making informed decisions regarding the companies’ securities.

Companies that defaulted for audited financial statements, 2023 include; Oando, which got a total fine of N41 million. Lasaco Assurance was fined N8.7 million, while Regency Alliance Insurance was fined N7.8 million.

Others include Guinea Insurance (N3.4 million), C& I Leasing (N3.2 million), Universal Insurance (N2.8 million), Secure Electronic Technology (N11.2 million), Conoil (N9.6 million), Caverton Offshore Group (N7.7 million), VFD Group (N5.6 million), FBN Holdings (N5.4 million), Sterling Financial Holdings Company (N6 million), UPDC (N3.9 million) ABC Transport (N3.2 million), Presco (N3.2 million), eTranzact International (N700,000), NCR Nigeria (N200,000), and African Alliance Insurance (N48.6 million).

For default filings of interim accounts for Q1 and Q2, 2024; Oando (N40.6 million), Briclinks Africa (N30,000), Caverton Offshore Support Group (N9.4 million), Universal Insurance (N3 million), C& I Leasing (N3.2 million), Secure Electronic Technology (N7.9 million), Conoil (N6.3 million), VFD Group (N2.5 million), FBN Holdings (N2.7 million), Sterling Financial Holdings Company (N2.9 million), UPDC (N800,000), and PZ Cussons Nigeria (N4 million).

Speaking on this, market operators agreed that the sanctions were warranted, saying, such sanctions would compel more quoted entities to disclose their information to the market on a timely basis.

The managing director of Crane Securities Limited, Mike Eze, said, the action of NGX would also boost investor confidence in the market because it is sending a clear message on the need for investors to get companies’ financial reports as at when due.

He added that investors always need to make informed decisions about which stocks to buy and that they can only be able to do that if companies release their regulatory filings on time.

The founder of the Independent Shareholders Association of Nigeria (ISAN), Sunny Nwosu, also agreed that the companies deserved to be sanctioned.

Nwosu noted that the affected companies ought to have filed their earnings reports on time to help shareholders to understand their financial health for investment decisions.

“It is not a new thing and it does not come to us as a surprise. We have constantly written to the exchange and raised the issue at annual general meetings that there is a need to know the status of these companies to enable us to take investment positions,” he noted.

For his part, the National Coordinator, Progressive Shareholders Association (PSAN), Boniface Okezie said, penalising companies for non-compliance with the rules of listing on NGX was 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.