The Nigerian Stock Exchange (NSE) has fined 19 quoted companies N52.5 million for failure to file their audited financial statements after the regulatory due date. Checks by New Telegraph showed that some of the companies were sanctioned for their inability to meet the regulatory requirements ranging between full year ended December 31, 2014 and first quarter ended March 31, 2016.
The companies include Great Nigeria Insurance Plc, Daar Communication Plc, DN Tyre & Rubber Plc, Equity Assurance Plc, Flour Mills Plc, Tripple Gee Plc and African Alliance Insurance Plc. Others are DN Meyers Plc, Standard Alliance Insurance Plc, Cornerstone Insurance Plc, Fortis Microfinance Bank Plc, Sovereign Trust Assurance Plc, among others.
Further investigation revealed that Great Nigeria Insurance Plc, Daar Communication Plc, DN Tyre & Rubber Plc and African Alliance Insurance Plc got about N43.6 million of the fines, which accounted for 83.04 per cent.
The Exchange, in its XCompliance report, explained that 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 is on the back of the Exchange’s determination to shift gears to drive innovations centered on increasing global visibility for the Nigerian capital market in the current year. Chief Executive Officer of the Nigerian Stock Exchange (NSE), Mr. Oscar Onyema, said recently that the local bourse will sustain a zero-tolerance stance on dealing member firms and listed companies’ violations to help boost the confidence in the market.
A founding member of Nigeria Shareholders Solidarity Asso-Prodciation and one of the leading shareholders’ activists, Alhaji Gbadebo Olatokunbo, said penalising erring companies is a signal that it is no longer business as usual. “The action is great and it shows that the NSE management is 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. Olatokunbo 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 gauge the real value of the companies.
Similarly, Managing Director Crane Securities, Mr. Mike Eze, 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.
He 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 this could only be achieved if there is adherence to good corporate governance by the quoted companies