NGX Fines 3 Listed Firms N11.2m For Financial Default

The Nigeria Exchange Limited (NGX) has fined Ecobank Transnational Incorporated(ETI), PZ Cussons Nigeria and John Holts Plc for failing to file their audited and interim financial statements after the regulatory due date in 2022.

The three companies were fined a combined N11.2 million for defaulting on the filing of their audited and interim financial statements in 2022.

For submitting its financial statements after the regulatory due date, Ecobank was fined N3.2 million, PZ Cussons was fined N4.8 million and John Holt was sanctioned N3.2 million. The fine was conveyed in the NGX’s X-Compliance report.

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 that, “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.”

NGX Regulation Limited (NGX REGCO) applied sanctions in accordance with the Rules for Filing of Accounts and Treatment of Default Filing, Rulebook of NGX (issuers’ rules)

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, Mr Mike Eze, said, the action of NGX would also boost investors’ 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 position,” he noted.

The president of Progressive Shareholders Association(PSAN), Mr 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, investors’ confidence in the regulatory capacity of NGX and the market would be enhanced.