Emmanuel Ochayi
NGX Imposes Fines on Nine Quoted Companies for Late Financial Statements
The Nigerian Exchange Limited (NGX), has fined nine quoted companies a total of N76.8 million for failing to file their audited financial statements on time.
This sanction comes as a response to the companies’ inability to meet regulatory requirements for the financial years ending 2022 and 2023.
Join our WhatsApp ChannelAn investigation by Nairametrics revealed that the companies penalised include African Alliance Insurance Plc, VFD Group Plc, FBN Holdings Plc, Sterling Financial Holdings Company Plc, UPDC Plc, ABC Transport Plc, Presco Plc, eTranzact International Plc, and NCR (Nigeria) Plc.
Companies Penalised by NGX
Further checks showed that African Alliance Insurance Plc faced the highest fine of N48.6 million for not filing its 2022 annual financial statement as required.
Other companies fined for failing to submit their 2023 annual financials include VFD Group Plc (N5.6 million), FBN Holdings Plc (N5.4 million), Sterling Financial Holdings Company Plc (N6 million), UPDC Plc (N3.9 million), ABC Transport Plc (N3.2 million), Presco Plc (N3.2 million), eTranzact International Plc (N700,000), and NCR (Nigeria) Plc (N200,000).
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Market Operators’ Reactions
Market operators view the NGX’s decision positively. The Managing Director of Crane Securities Limited, Mr. Mike Eze, said, “This action by NGX boosts investor confidence in the market.
It signals the necessity for timely financial reports from companies.” He emphasised that investors need accurate and timely information to make informed decisions about stock purchases, which relies on good corporate governance from the listed companies.
Sir Sunny Nwosu, founder of the Independent Shareholders Association of Nigeria (ISAN), noted, “The affected companies should have ensured compliance to help shareholders understand their financial health for investment decisions.
Unsurprisingly, we have raised this issue in annual general meetings.” He highlighted the importance of knowing the status of companies to make informed investment decisions.
Mr. Boniface Okezie, President of the Progressive Shareholders Association, supported the NGX’s move. “It’s better to have a few compliant companies than many that do not meet post-listing requirements.
Penalizing non-compliant companies leads to more appropriate securities pricing and compels timely information disclosure, enhancing investor confidence in the regulatory capacity of NGX.”
NGX’s Stance on Compliance
The NGX explained its actions through the X-Compliance report, which aims to maintain market integrity and protect investors by providing compliance-related information on all listed companies.
The report states, “Listed companies are required to adhere to high disclosure standards as prescribed in Appendix 111 of the Listing Rules. Financial information, both periodic and ongoing material events, should be promptly disclosed to The Exchange to maintain an orderly market.”
Implications for Investors
Investors should be aware that the NGX is serious about enforcing compliance with its listing rules. This enforcement ensures that companies remain transparent and provide necessary financial information promptly.
The NGX’s actions demonstrate a commitment to maintaining market integrity and protecting investor interests.
Mr. Eze reiterated, “Timely financial reporting is crucial for market efficiency and investor confidence. This enforcement action by NGX underscores the importance of adherence to disclosure standards.”
The NGX’s decision to fine nine companies for late financial reporting highlights the importance of compliance with regulatory requirements.
This move aims to enhance transparency and ensure that investors have access to accurate and timely information, ultimately leading to a more efficient and trustworthy market.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
