Financial statements default: NSE fines 29 firms N297m

The Nigerian Stock Exchange (NSE) has fined 29 quoted companies the sum of N296.9 million for failure to file their audited financial statements after the regulatory due date.

Checks showed that some of the companies were sanctioned for their inability to meet the regulatory requirements ranging between full year ended December 31, 2015 and second quarter of 2017.The erring firms are Great Nigeria Insurance Plc, Daar Communication Plc, Guinea Insurance Plc, Newrest ASL Plc, Niger Insurance Plc, Nigerian Enamelware Plc, Phama-Deko Plc, Premier Paints Plc, Presco Plc, Royal Exchange Plc and Fortis Microfinance Bank Plc. Others are Sovereign Trust Assurance Plc,  Staco Plc, Standard Alliance Insurance Plc, Thomas Wyatt Plc, Union Diagnostic & Clinical Services Plc, Unity Bank Plc, Equity Assurance Plc, Flour Mills Plc, A.G. Leventis Nig Plc, African Alliance Plc, Afromedia Plc, Austin Laz & Co. Plc, Capital Hotel Plc, Capital Oil Plc, among others.Further checks showed that African Alliance Plc, Great Nigeria Insurance Plc, Thomas Wyatt Plc, Fortis Microfinance Bank Plc and Daar Communication Plc got about N161.1 million of the fines, which accounts for 54 per cent.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.The Chief Executive Officer of the Nigerian Stock Exchange (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.

Managing Director, Crane Securities, Mr. Mike Eze, reacting to the development, 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.He added that investors need to take informed decisions before choosing, which stock to buy. And the quoted companies could only achieve this if there is adherence of good corporate governance.A founding member of Nigeria Shareholders Solidarity Association (NSSA), one of the leading shareholders’ activists, Alhaji Gbadebo Olatokunbo, said  penalising erring companies is a signal that it is no longer  business as usual.He said: “The action is great and it shows that the NSE management is becoming alive to its responsibilities. Besides, it is a signal to the companies in particular and the capital market in general that it is no longer business as usual. We must always abide by the rules,” he said.He noted that the sanction would make other companies sit up and post their results as at when due – thereby providing investors, analyst and stockbrokers the platform to predict the real value of the companies.