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NSE: Companies default on results submission

By on January 27, 2014

As the Nigerian Stock Exchange hit impressive targets in its quest to becoming the gateway to African markets, it has been discovered that many listed companies are failing to submit their results as and when due.

This is despite the fact that they risk sanctions for such infractions. For instance, in each of the first three quarters of 2013, not up to 60 per cent of the companies submitted their results on time.

Data obtained from the NSE showed that in the first quarter of the year, 56.91 per cent of companies filed their results when due, while 43.09 per cent failed to do so.

The situation worsened in the second quarter as 46 per cent of the companies filed their quarterly accounts, while the larger number, 54 per cent did not meet the regulatory due date.

The figures for the third quarter were little-changed as 47 per cent submitted their quarterly accounts on time, while 53 per cent failed to do so.

Over time, shareholders associations and even some capital market operators 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 monthly NSE’s X-Compliance Report, a transparency initiative of the exchange aimed at maintaining market integrity and protecting investors by providing compliance-related information on all listed companies, also indicates there have been instances of non-disclosure, among other forms of infractions.

Although the report also shows the fines or sanctions being imposed by the NSE to curb such infractions, shareholders have said much more needs to be done.

The President, Mr. Boniface Okezie, said there was the need for the Securities and Exchange Commission and the NSE to do more in ensuring that companies comply with corporate governance guidelines.

He said, in addition to ensuring that companies complied fully with disclosure guidelines, the regulators should strengthen rules revolving around such issues as share buy-back and rights issuance.

He added, “If the activities of companies are not properly regulated, there will be problems in the market.”

The President, Constance Shareholders Association of Nigeria, Mr. Shehu Mikail, who said the NSE and SEC were guiding the market in the right direction, however, called for stiffer sanctions for companies violating guidelines.

For instance, he said while the IFRS reporting standards introduced for companies was aimed at boosting transparency, it was unfortunate that not all companies had complied.

“I also want the regulators to review some rules to allow for the imposition of better sanctions for companies,” he said.

However, the Chief Executive Officer, NSE, Mr. Oscar Onyema, said during a news briefing in Lagos on Wednesday that the NSE had taken a tougher stand on errant companies in recent times.

Onyema, who said fines imposed on listed companies in 2013 amounted to N61.2m, noted that the figure showed that the NSE was not keen to let companies get away with infractions.

Onyema, however, said the NSE was with talks with companies and relevant insurance authorities to fast track the resolution of the problems.

 

[Punch]