The Nigerian Stock Exchange (NSE) has sanctioned 35 companies with fines totalling N452 million for failing to file their financial statements at the regulatory date.
According to the data obtained from the Exchange, among the companies fined, eight were financial institutions, showing that Unity Bank Plc owed the highest amount of N79.7 million. At different times this year, the bank was fined N40.7 million for year-end, 2017, N29 million in first quarter, N9.8 for second quarter and N200, 000 for third quarter, 2018.
Diamond Bank followed as the second highly sanctioned bank with a N7.3 million fine, while Fidelity Bank to pay N6.2 million fine.
Union Bank was fined N4.7 million for late filing of its audited 2017 and first quarter 2018 financial statements, while FBN Holdings Plc was fined N2.1 million for failing to file its audited 2017 financial statements as and when due.
Sterling Bank, Wema Bank, and FCMB Groups were fined N1.3 million, N800,000, and N100,000 respectively for late filing of their audited 2017 financial statements.
Among others are, Ekocorp owes N75.6 million, Academy Press, N35 million, Premier Paints, N11.2 million, and Austin Laz, N5.4 million.
The Exchange, in its X-Compliance report, explained that the initiative was designed to maintain market integrity and protect the investors by providing compliance-related information on all listed companies.
The report stated, “Companies that are listed on the Exchange are required to adhere to high disclosure standards, which are prescribed in Appendix 111 of the listing rules. Financial information, which is periodic disclosure and on-going material events disclosure, should be released to the Exchange in a timely manner to enable it efficiently perform its function of maintaining an orderly market.”
The NSE in an effort to achieve a world class capital market has reiterated its commitment to maintain zero tolerance posture on dealing member firms and quoted companies on violations of rules and regulations.
Chief executive officer of NSE, Mr. Oscar Onyema, said recently that the Exchange will sustain a zero-tolerance stance on dealing member firms and listed companies’ violations to help boost the confidence in the market.
The NSE stated that “late filing has the potential to adversely affect the market and their shareholders. It creates grounds for avoidable doubts regarding companies’ performances. The Exchange is monitoring the compliance status of these companies very closely and is engaging the affected companies accordingly. We encourage investors to always check the X-Compliance Report and Released Financials on our website for full details of the compliance status of listed companies before making investment decisions.”
Capital market operators and shareholders said that late filing has the potential to adversely affect the capital market and shareholders who invested in those companies.
The managing director of HighCap Securities Limited, Mr. David Adonri said that stated that late filing has the potential to adversely affect the market and their shareholders, saying that stocks market is information driven. Adonri noted that violating listing rules should not be encouraged to enable investors take rightful investment decision.
Also, the founder, Independent Shareholders Association of Nigeria (ISAN), Mr. Sunny Nwosu, argued that the sanction by NSE was too alarming as most of these companies do not pay dividends because the little profit they have made is being used to pay the penalty fees imposed on them due to their inability to submit their audited financial results.
“I also believe that stiff penalty fee is not the solution to the issue of not meeting up with submission of annual returns to the NSE. Again, this can force some of these companies to delist from the exchange and once they delist from the exchange, some history and antecedent has not seen stock exchange helping us recover our investment in these companies when they delist.”