The Nigerian Exchange Limited (NGX) has imposed N32.74 million fine on eight quoted companies for failure to file their unaudited financial statements for the first quarter this year after the regulatory due date.
According to the fine information contained in the Exchange’s X-Compliance report, the affected companies comprised Presco Plc, Ardova Plc, Briclinks Africa Plc, Universal Insurance Plc, Unity Bank Plc, Conoil Oil Plc, FBNH Plc, and Caverton Offshore Support Plc.
The fines slammed on some of the entities were Presco Plc with N9.4 million, Ardova, with N7.2 million, and Universal Insurance Plc, with N.4.7 million fine, which reflected that the three accounted for 65.05% of the total fines levied on defaulters.
The NGX, in its X-Compliance report, noted that the application of regulatory sanctions on defaulting entities was designed to maintain market integrity and protect investors by providing compliance-related information on all listed entities on the Exchange.
Most investment experts, including top players in the local bourse, endorsed the market regulatory institution’s action and described penalties for non-compliance by the affected listed companies with the rules of listing on NGX as a desirable measure as it will lead to more appropriate pricing of securities.
Speaking on the NGX’s sanctions, the former National President of the Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu, pointed out that the affected companies were supposed to have ensured that they complied with the requirements to help shareholders to understand their financial health for investment decisions.
He explained: “It is not a new thing, and it does not come to us as a surprise. We have constantly written to the Exchange and raised the issue at annual general meetings that there is a need to know the status of these companies to enable us to take investment position.”
Also, the President of Progressive Shareholders Association, Mr Boniface Okezie, explained that it was better for Nigerians to have a few companies that are ready to comply with the regulatory rules than to have listed entities that are not ready to satisfy post-listing requirements.
Okezie, who also justified the NGX action in view of its potential for appropriate pricing of securities, maintained that with the wielding of the regulatory stick, more entities would be compelled to provide crucial information to the market on a timely basis and by so doing, build investor confidence in the market.
In addition, a member of Nigeria Shareholders Solidarity Association (NSSA), Alhaji Gbadebo Olatokunbo canvassed the need for all operators in the market to always abide by the rules, adding that sanctions will make the companies sit up and present their financial results as and when due.
The investment expert said that the sanction would help in providing investors, stockbrokers and other stakeholders the basis of making projections about real values of the companies and influence their investment decisions, especially on returns prospects.
