Nigeria Employers’ Consultative Association (NECA) has petitioned the Federal Government accusing the Securities and Exchange Commission (SEC) of allegedly frustrating efforts by quoted firms’ quest for new investments.
In its petition to Kemi Adeosun, minister of finance and members of the Economic Management Team (EMT), a copy of which was made available to BusinessDay, the employers’ body accused SEC of frustrating growth and investments through an alleged emphasis on revenue generation and “gun-to the-head approach to regulation.”
The petition dated September 26, and signed by Olusegun Oshinowo, its director general, reads in part: “There is the need for SEC to treat without delay the applications of companies trying to expand their capital base through new investment without the conditionality to pay up the disputed and unfair penalty imposed on them.
“In the light of the foregoing, we appeal to you Honourable Minister and the Economic Management Team (EMT) of the federation to request SEC to support companies to survive this period of recession by making the capital market attractive to them. We are available to provide further insight into the contents of this letter.”
According to NECA, “payment of humongous penalties imposed on quoted companies may trigger the delisting of several companies from the Stock Exchange and their conversion from public to private companies, which the economy does not require at this time of economic recession, as it will send a bad signal to potential foreign investors.
“We hereby bring to your notice that while the processing of applications to raise funds from the capital market by companies are currently suspended by SEC due to its insistence that affected companies must first pay the penalties for failure to file Q4 financial statements, some of our members are scared of approaching the capital market due to these controversial penalties and conflicting regulations. This is not good for the development of the capital market at this challenging period.”
NECA also lamented inability to engage the leadership of SEC due to the absence of a board, saying, “as agreed at the said 22 June 2016 meeting between the top leadership of SEC and NECA, SEC should amend its rules to clearly provide that a public company that can file audited results within 60 days after the financial year need not file its Q4 interim unaudited results.
“However, if a public company feels that it would not be able to file its audited results within 60 days after the year end, then, it must file its Q4 unaudited results. “Our members were served with demand notices in various very huge sums as penalties for alleged failure to file Quarter 4 interim unaudited results for a number of years with threats of enforcement. The default by member-companies was not deliberate but based on the regulations and practice in the capital market on this issue.
“By virtue of Rule 19.6 of the attached Nigerian Stock Exchange (NSE) which was approved by SEC as the apex regulatory authority in the capital market in Nigeria, Q4 financial statements are not required to be filed with the regulatory authorities by companies.”