- Stock Exchange Suspends Trading on 17 Companies
The Nigerian Stock Exchange (NSE) has suspended trading on the shares of 17 companies following the failure of the companies to adhere to best corporate governance and extant post-listing requirements.
The suspended companies included African Alliance Insurance, Equity Assurance, Fortis Microfinance Bank, Guinea Insurance, Premier Paints, Resort Savings & Loans, Sovereign Trust Insurance, African Paints (Nigeria), Aso Savings & Loans, Ekocorp, Evans Medical, Goldlink Insurance, Great Nigeria Insurance, Omatek Ventures, Union Dicon Salt, Union Homes Savings & Loans and Universal Insurance Company.
A circular 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.
Most quoted companies including all banks, major manufacturers, oil and gas companies, breweries and cement companies use the 12-month Gregorian calendar year as their business year. 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 its 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.