The Nigerian Exchange Limited (NGX) has penalised nine publicly traded firms N76.8 million for failing to file audited financial accounts beyond the statutory deadline. Businessworld research revealed that the companies were sanctioned for failing to meet regulatory criteria for the fiscal years ending in 2022 and 2023.
The companies are African Alliance Insurance Plc, VFD Group Plc, FBN Holdings Plc, Sterling Financial Holdings Company Plc, UPDC Plc, ABC Transport Plc, Presco Plc, eTranzact International Plc, and NCR (Nigeria) Plc.
Further investigation revealed that African Alliance Insurance Plc had been fined N48.6 million for failing to file the 2022 annual financial statement by the deadline.
Others that failed to submit their 2023 annual financials include VFD Group Plc (N5.6 million), FBN Holdings Plc (N5.4 million), Sterling Financial Holdings Company Plc (N6 million), UPDC Plc (3.9 million), ABC Transport Plc (N3.2 million), Presco Plc (N3.2 million), eTranzact International Plc (N700,000), and NCR (Nigeria) Plc (N200,000.00), for a total fine of N76.8 million.
Market operators agreed that the penalties for noncompliance with the NGX listing criteria is a positive development because it will result in more suitable security pricing. More quoted firms would be forced to provide timely market information.
Mr. Mike Eze, Managing Director of Crane Securities Limited, stated in response to the development on an inquiry by Businessworld that NGX’s action would boost investor confidence in the market because it sends a signal to investors that they must receive companies’ financial reports on time.
He went on to say that investors must make informed decisions before deciding which stock to buy, which can only be accomplished if quoted firms adhere to sound corporate governance practices.
According to Sir Sunny Nwosu, the founder of the Independent Shareholders Association of Nigeria (ISAN), the affected companies were expected to have guaranteed that they met the requirements in order for shareholders to understand their financial health and make investment decisions.
Also, Mr. Boniface Okezie, President of the Progressive Shareholders Association, stated that it is better for Nigerians to have a few firms that are willing to play by the rules than to have all of the companies in the world that are unable to meet post-listing standards.
Okezie stated that penalising corporations for noncompliance with NGX listing requirements was a positive move since it will result in more suitable securities pricing.
He stated that more businesses would be required to provide timely information to the market, increasing investor trust in the NGX’s regulatory capability and the market.
