- Stock Exchange Suspends Trading on Eight Companies
Authorities at the Nigerian Stock Exchange (NSE) yesterday suspended trading on eight companies for failing to adhere to best corporate governance and extant post-listing requirements.
The suspended companies included seven insurance companies and an automobile company. The suspended companies include African Alliance Insurance, Cornerstone Insurance, R T Briscoe, Royal Exchange, STACO Insurance, Standard Alliance Insurance, Universal Insurance Company and Veritas Kapital Assurance.
A report obtained by The Nation indicated that the companies were suspended after they failed to file their accounts and operational reports as required by the listing rules at the Exchange. The suspension will remain in place until the companies file the relevant accounts and reports.
With the suspension, investors will not be able to trade on the shares of the companies, thus denying them opportunities to raise funds through such investments in case of financial needs.
Post-listing rules at the NSE require quoted companies to submit their audited earnings reports, not later than 90 calendar days, or three months, after the expiration of the period. The rules also require quoted companies to submit interim report not later than 30 calendar days after the end of the relevant period.
Not less than 83 per cent of quoted companies use the 12-month Gregorian calendar year as their business year. The business year thus terminates on December 31. While March 31 is usually the deadline for submission of annual report for companies with Gregorian calendar business year, the deadline for the quarterly report is a month after the quarter.
NSE tags and applies fines on companies that fail to meet earnings reports’ deadline. The Exchange had on January 1, 2017 launched a new sanction regime for delay in submission of companies’ results. Under the new sanction regime, companies may pay fines that range from N100, 000 to more than N100 million as penalties for delay in the submission of their corporate earnings reports.
Companies that also delayed their financial statements and accounts face threats of suspension and delisting in addition to the monetary fines.
Under the new rules, quoted companies will be required to file their unaudited quarterly accounts with the NSE not later than 30 calendar days after the relevant quarter, and publish it within five business days after the date of filing, in at least two national daily newspapers, and post it on the company’s website, with the web address disclosed in the newspaper publication. Also, an electronic copy of the publication shall be filed with the Exchange on the same day as the newspaper publication. Where the company chooses to audit its quarterly accounts, it shall be required to file such accounts not later than 60 calendar days after the relevant quarter.
For annual audited accounts, the new rules require companies to file their audited annual report and accounts with the Exchange not later than 90 calendar days after the relevant year end, and published in at least two national daily newspapers not later than 21 calendar days before the date of the annual general meeting, and posted same on the company’s website with the web address disclosed in the newspaper publications. Also, an electronic copy of the publication shall be filed with the Exchange on the same day as the publication.
