As the deadline for quoted companies to submit their audited report and accounts for the year ended December 31, 2015 expired last week, there are strong indications that the Nigerian Stock Exchange (NSE) may sanction Unity Bank and 31 other listed companies over non compliance.
Post-listing rules at the NSE require quoted companies to submit their earnings reports, not later than three months after the expiration of the period.
Most quoted companies including banks, major manufacturers, oil and gas companies, breweries and cement companies use the 12-month Gregorian calendar year as their business year. The business year thus terminates on December 31of every year.
NSE’s regulatory filing calendar indicates that the deadline for submission of annual report for companies with Gregorian calendar business year ended March 31 and an extension of one month was given which was April 30, 2015.
The data available to Business247 show that there is high compliance from quoted companies on timely submission of results, as at April 29, 2016, 32 companies or 27 per cent of the 118 quoted companies with December 31, 2015 as financial year are yet to submit their results, as 73 per cent have submitted theirs.
It is a known fact that capital market is information driven and some companies having performed poorly in their results will wait for the next quarter to cover up for the poor performance of the previous quarter.
In ensuring that investors are not misled in their investment decision, the NSE enforced its rules and regulations, especially the post-listing rules that define the integrity of the market as it tags and applies fines on companies that fail to meet earnings reports’ deadline.
In the last three years, NSE X-compliance report showed that 39 companies have been fined N110 million over delayed results.
Companies that are yet to submit their 2015 audited results, included Unity Bank, Stanbic IBTC, and Skye Bank Plc under the Banking sub-sector.
The likes of Stanbic IBTC had written to NSE that its 2015 accounts will be concluded on or before 31 May 2016.
Also, 12 insurance companies have not submitted theirs. They are African Alliance, Cornerstone Insurance, Equity Assurance, Great Nigeria Insurance, Guinea Insurance, Lasaco Insurance, Linkage Insurance, Mutual Benefit Insurance, Niger Insurance, Royal Insurance, Sovereign Trust Insurance and Standard and Allied Insurance.
Others are Oando, Premier Paints, Presco, R.T. Briscoe, A.G. Leventis, Abbey Mortgage among others.
Over time, capital market operators and shareholders associations have called for stronger regulatory oversight for listed companies.
According to them, with shareholders having limited opportunities to interact with the management and boards of companies in which they have investments, it is up to the regulators to ensure that the companies operate based on the highest standards.
The Managing Director of GTI Securities Limited, Mr. Tunde Oyekunle, said, “We acknowledge the efforts of the present leadership of the NSE to enforce the rule on companies’ rendition of audited accounts. The zero tolerance and imposition of fine for default companies is in order. Strict monitoring and enforcement of the NSE rules have become expedient to act as a deterrent to intending offenders.
He pointed out that the current reforms in the capital market have aimed at strengthening corporate governance and transparency by all companies listed on the exchange, saying that there should be no laxity to ensure safety of public funds.
By our Correspondent
Comments are closed.