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18 companies pay N33.9m for late account submission

By on August 22, 2014

Eighteen listed companies were fined N33.9m by the Nigerian Stock Exchange between January and July 18 this year for filing their financial statements after the regulatory due date.

The Exchange explained in the latest edition of its ‘X-Compliance Report’ that it applied sanctions in accordance with the provisions of Section 14 of Appendix 111 of its listing rules.

Information obtained from the report showed that 34.5 per cent or N11.7m of the fines went to quoted insurance companies, which have had challenges adopting the International Financial Reporting Standards in filing their accounts.

Nine insurance firms were among the companies fined for default-filing of their financial statements.

FTN Cocoa Processing Plc was handed the heaviest fine. The company was fined N6.1m for filing its financial statements for the year ended December 2012 and additional N900,000 for the default-filing of its financials for the year ended December 2013, bringing the total fine to N7m.

Ikeja Hotel Plc was fined N5.5m for failing to file its financial statement when due, while International Energy Insurance Plc and Aso Savings and Loans Plc had to pay N5.4m and N5m, respectively for the default filing of their 2012 financial statements.

Also, Interlinked Technologies Plc was asked to pay N2.9m, with Sovereign Trust Assurance Plc and Niger Insurance Plc fined N1.1m and N1m, respectively.

The 11 remaining companies all had to pay less than N1m for the default filing of their financial statements for the financial year ended December 2013.

They include Continental Reinsurance Plc (N900,000), Aiico Insurance Plc (N800,000), while Oasis Insurance Plc and WAPIC Insurance Plc were made to pay N70,0000 each.

Also, Regency Alliance Insurance Plc and Law Union & Rock Plc were each fined N600,000, while NCR Plc and Studio Press Plc were asked to pay N500,000 and N400,000, respectively.

The National Salt Company of Nigeria Plc and Austin Laz & Co. Plc were fined N300,000 each, with Abbey Building Society Plc paying the least fine of N200,000.

The NSE and the Securities and Exchange Commission have adopted a zero tolerance stance with regard to violation of regulatory guidelines and market infractions.

As a result and in what they say is the desire to protect investors, ensure transparency and enshrine good governance in the market, sanctions have been imposed on market operators and quoted companies several times.

Only recently, the Exchange announced plans to de-list 21 companies because of their failure to file quarterly and annual financial statements as required by the Listing Rules.

“This regulatory action is necessary in order to protect the investing public from trading in securities of entities with no current information regarding their financial status,” it said.

But some shareholders believe that contrary to the explanation by the NSE that such actions were in their interest, the reality was that they were the ones suffering the consequences of fines and the likes.

The National Coordinator, Independent Shareholders Association, Mr. Sunny Nwosu, told our correspondent via the telephone on Wednesday that one of the problems in the market currently was the needless imposition of fines.

Nwosu said, “I am not saying that people should not follow the rules, but when you are imposing penalties that will not have meaning to the shareholders, the end result is that it is the shareholders who will suffer the consequences. And when we ask questions about the penalties paid at annual general meetings, the companies will say they are imposed on them by the Stock Exchange.

“We want to see a situation where the Exchange will be very beneficial to the shareholders. It is not penalties that make the Exchange beneficial to the shareholders.”

He gave the assurance that shareholders on their part would continue to advise the companies and operators to abide by the rules of the Exchange to avoid paying such penalties.

[Punch]