The Nigerian Exchange Limited (NGX) has imposed fines totaling N76.8 million on nine listed companies for not submitting their audited financial statements by the regulatory deadline.
Nairametrics’ investigation revealed that these companies were penalized for failing to comply with the regulatory filings for the fiscal years 2022 and 2023.
The penalized companies are 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.
African Alliance Insurance Plc was notably fined N48.6 million for not filing its annual financial statement for 2022 as required.
Other entities that failed to submit their 2023 annual financials include VFD Group Plc, with a fine of 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, with a fine of N200,000, totaling a cumulative fine of N76.8 million.
Market operators concur that the sanctions for non-compliance with NGX listing rules are positive, as they will lead to more accurate securities pricing. This will also ensure that more listed entities provide timely information to the market.
The Managing Director of Crane Securities Limited, Mr. Mike Eze, in response to an inquiry by Nairametrics, stated that NGX’s actions would enhance investor confidence in the market by signaling the importance of receiving timely financial reports from companies.
He added that investors needed to make informed decisions before choosing which stock to buy and this can only be achieved if there is adherence to good corporate governance by the quoted companies.
According to the founder of the Independent Shareholders Association of Nigeria (ISAN), Sir. Sunny Nwosu, noted that the affected companies were supposed to have ensured that they met the requirements as such would help shareholders to understand their financial health for investment decisions.
“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,” he noted.
Also, the President, of Progressive Shareholders Association, Mr. Boniface Okezie, said it was better for Nigerians to have a few companies that are ready to play by the rules than to have all the companies in the world that are not ready to satisfy post-listing requirements.
Okezie said that penalizing companies for non-compliance with the rules of listing on NGX was a welcome development, as it will lead to more appropriate pricing of securities.
He said more entities would be compelled to give information to the market on a timely basis, adding that investor confidence in the regulatory capacity of NGX and the market would be enhanced.
