Market operators have commended the Nigerian Exchange Limited (NGX) for the recent N32.74 million fine slammed on Unity Bank, Conoil and six other quoted companies for failure to file their unaudited financial statement after the regulatory due date.
The companies were sanctioned during the current year 2023 for their inability to meet the regulatory requirements during the first quarter of 2023.
The companies include Presco Plc, Ardova Plc, Briclinks Africa Plc, Universal Insurance Plc, Unity Bank Plc, Conoil Oil Plc, FBNH Plc, and Caverton Offshore Support Plc.
Also, Presco Plc was fined N9.4 million, Ardova, N7.2 million, and Universal Insurance Plc will pay N4.7 million as fine accounting for a cumulative fine of N21.3 million and represented 65.05 per cent of the total fines levied on defaulters.
The Managing Director of Crane Securities Limited, Mr. Mike Eze, while reacting to the development said the action of NGX would boost investor confidence in the market because it is sending a signal for investors to get companies’ financial reports as at when due.
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.
“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 positions,” 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.
“We must always abide by the rules, sanctions would make the companies sit up and post their results as and when due, thereby providing investors, analysts, and stockbrokers the platform to predict the real value of the companies”.
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.
“Financial information which is periodic disclosure and ongoing material events disclosure should be released to The Exchange promptly to enable it efficiently perform its function of maintaining an orderly market”.
