The Nigerian Stock Exchange (NGX) Limited has fined 13 companies for failing to file their financial statements after the regulatory due date.
According to the Exchange’s X-compliance report, the companies were sanctioned during the current financial year 2022 for failing to meet the regulatory requirements covering third quarter (Q3) of 2021, full year (FY) of 2021 and Q1 2022.
The affected entities include; Honeywell Flour Mills, Notore Chemical Industries Plc, Union Bank of Nigeria, Japaul Gold and Ventures Plc, Unity Bank, Presco Plc, Veritas Kapital and Lasaco Assurance Plc. Others include FBN Holdings, Ardova Plc, C&I Leasing, Coronation Insurance Plc and Briclinks Africa Plc.
The X-Compliance Report is a transparency initiative of NGX Regulation Limited (NGX RegCo), which is designed to maintain market integrity and protect investors by providing compliance related information on all listed companies.
By its listing regulation, companies listed on the NGX are expected to file yearly and quarterly financial reports, 30 days after the end of each quarter. Usually, companies that fall short of this rule are tagged MRF (Missed Regulatory Filing) and the omission often attracts financial sanction.
The exchange had said that companies that are listed on its platform are required to adhere to high disclosure standards which are prescribed in the Rulebook of NGX, 2015 (Issuers’ Rules), and other Rules of NGX, from time to time.
It said, “Financial information, which is periodic disclosure, as well as on-going material information disclosure should be released to NGX in a timely manner to enable it efficiently perform its function of maintaining an orderly market”.
A breakdown from the X-compliance report obtained from the NGX website showed that Honeywell Flour was fined to the tune of N1.2 million, Notore was fined N900,000, UBN was fined N1.2 million, Japaul was fined N2.8 million, Union Bank was fined N4.2 million for failing to file its 2021 FY and 2022 Q1 results while Presco Plc got fined N5.1 million.
Similarly, Veritas Kapital was fined N4.8 million, Lasaco fined N5.3 million, FBN Holdings got fined to the tune of N8.1 million, Ardova fined N9.7 million, C&I Leasing fined N20.4 million, Coronation Insurance fined N14.9 million while Briclinks got fined to the tune of N70,000.
Commenting on the sanction which some observers described as punitive especially at a time of the current realities of the economy, the National Coordinator, Progressive Association of Nigeria, Boniface Okezie, maintained that the failure of the companies to adhere to high disclosure standards should not be encouraged because the stock market is information driven.
He, however, said the NGX as a self-regulatory body must do due diligence to find out why the affected companies did not meet the submission of their results as at when due.
“I agree that companies must adhere to the rules and those fined will be gingered as to not default in that aspect in the next financial year. However, these companies may have encountered one problem or the other that must have prevented them from meeting the deadline. We are complaining that companies are leaving the country at the moment but we are forgetting that these fines paid to regulatory bodies might in a way affect the growth of these companies”, Okezie said.
