By Kayode Tokede
About 20 struggling companies on the Nigerian Stock Exchange (NSE) have defaulted the post listing rule that mandates prompt disclosure of result and accounts to stakeholders and general public.
These 20 companies have failed in releasing nine months results for the period ended September 30, 2018 to the Exchange as at the time of filing in this report.
Quoted companies on The Exchange are required to file their quarterly accounts within 30 days after the end of the quarter in accordance with Appendix iii of the Listing Rules.
The affected companies are Union Homes Savings & Loans, Fortis Microfinance Plc, NPF Microfinance Bank Plc,Staco Insurance Plc, Cement Company of Northern Nigeria Plc, Smart Products Nigeria Plc, African Alliance Insurance Plc, Skye bank Plc (now Polaris Bank), Roads Nigeria Plc, Juli Plc and Unic Diversified Holdings Plc.
Others are Resort Savings & Loans, Omatek Ventures Plc, Anino International Plc, Aso Savings & Loans Plc, Golden Guinea Breweries Plc , Goldlink Insurance Plc, Nigerian German Chemical Plc, International Energy Insurance and Evans Medical Plc.
Most of the above companies have not submitted second quarter results of 2018 to the NSE to signal resurgence in share prices and fundamentals.
The like of Fortis Microfinance Bank, Smart Products Nigeria, African Alliance Insurance, Roads Nigeria, Nigerian German Chemical, Golden Guinea Breweries, Anino International, Juli , Union Homes Savings & Loans, Goldlink Insurance, Unic Diversified Holdings, Evans Medical, International Energy Insurance, Omatek Ventures, Aso Savings & Loans, and Resort Savings & Loans are yet to submit second quarter financial statement for 2018.
Further findings revealed that 16 of the above companies have submitted first quarter results to the Exchange.
In protecting investors, the Exchange had tagged these companies Missed Regulatory Fillings (MRF) or Awaiting Regulatory Approval (AWR).
A stockbroker, and the Managing Director of High Cap Securities Limited, David Adonri, explained to Nigerian NewsDirect that listed companies are to abide by NSE post listing rules at which prompt filing of result is one of them.
He expressed that insurance companies are treating filing of results on time with levity and unconcerned about the impact on investing public and nations’ economy at large.
According to him, “If these insurance companies are not complying with post listing requirement, they are indirectly hurting investors. A lot of insurance companies are not serious and careless about the importance of filing accounts on time.
“We all have seen the negative impact on these companies’ shares as most are traded below their intrinsic value.
“However, a few of them have strong corporate governance and robust fundamentals that required of them of submitting accounts on times.”
The Exchange started implementation of the rules on submission of periodic reports and results and the enhanced sanction regime on January 1, last year. Under the rules, quoted companies are required to file their unaudited quarterly accounts with the NSE not later than 30 calendar days after the relevant quarter, and publish it within five business days after the date of filing, in at least two national daily newspapers.
Any company that fails to publish accounts in two national daily newspapers as required, or fails to provide proof of publication, and for each instance of non-compliance with any directives of the Exchange, shall also be required to pay a fine of 50 per cent of its annual listing fee and a fine of N25,000 for every day the company remains in default.
Where a company fails to also file its accounts after the second additional period of 90 days, bringing the default days to 180, days, the Exchange may take further appropriate actions including cautioning shareholders that the company’s listing is under threat of delisting and eventual delisting.
The rules also empower the Exchange to delist a company within the first 90 days where the NSE determines that granting extended period is not necessary, especially where there are proven issues of financial fraud, gross corporate governance abuses.
However, the new rules make provisions for companies that require extended period to complete, audit or get regulatory approval for their accounts. The new rules grant the Exchange the powers to grant waivers and extension to companies based on the peculiarities of each company upon request by such company.
A defaulting company shall be required to pay the fines notwithstanding remedial action taken after the earnings submission deadline. According to the rules, notwithstanding that a company takes the required steps during the cure periods or later complies with the provisions of the rules, any company that defaults in filing its accounts within the stipulated periods shall be liable to pay the applicable penalties stated above, except the affected company had received waiver or extension of time by the Exchange.