There are indications that Securities and Exchange Commission (SEC) and The Nigerian Stock Exchange (NSE) have devised means of curbing listed companies non-compliance to posting listing requirement of late submitting of results.
The plan of the NSE is to earmark a portion of the fines for training and capacity enhancement of the defaulting company’s directors, especially those put at the helm of affairs of financial services, the source explained.
At a media briefing of the Capital Market Committee (CMC) meeting held recently, source from the capital market regulatory body noted that whenever a listed company commits an infraction e.g. delay in filing their financial report, they get fines from the NSE, but that will change now as the NSE plans to use the financial cost for an infraction, to send the company personnel in charge of such infraction for a training equivalent to 60 percent of the fine.
” The training will enable them to learn more about the company’s business and other financial literacy issues,” he said
Companies who have failed to file their financial statements after the regulatory due date for 2018 alone are 36 in number, and thus, have been slapped a collective fine of N421 million.
A look at the list from the NSE’s X-compliance report shows that some of the companies were sanctioned for their inability to meet the regulatory requirements ranging between audited financials for the full year ended December 2017 and third quarter of 2018.
The breakdown showed that 11 insurance companies were fined a total of N150.5 million, which amounted to about 36 per cent of the total amount fined by the NSE during the period under review.
The penalties on companies vary because it is charged per day; a source from the NSE told our correspondent. This means that the longer it takes for a company to submit its financials the larger the value of fine such company will pay.
Leading the rest of the pack with N78.7 million in fines for defaulting in 2018 submission was FTN Cocoa processors. According to the NSE, FTN Cocoa is currently undergoing restructuring, with approval from the Quotations Committee of National Council of The Nigerian Stock Exchange (QCN).
Academy press last released result was their result of Q3 2017, which was submitted in March 2018. They have notified stakeholders of the delay in filing their Q1 2018 result due to “unanticipated delay in audit exercise” of their financials. The company has however been fined N35 million by the NSE for their defaulting.
Union Dicon Salt Plc was next with a fine of N30.8 million for failing to submit their audited financials for 2017 and 2018 results respectively.
Conoil Plc was the fourth company with the highest fine amongst defaulters that are not banking or insurance institutions. They were slapped with a fine of N17.3 million.
A.G Leventis followed with a fine of N2.7 million while Meyer Plc got N2.1 million.
Other defaulting companies are Presco, Thomas Wyatt, Vitafoam, Medview and Abbey mortgage Bank. They were fined N1.3 million, N1 million, N800,000, N700,000 and N700,000 respectively
Others are PZ Cussons and International Breweries fined N200,000 and N100,000 respectively.
The penalties listed in the NSE X-Compliance report revealed that these penalties levied on companies for failure to file their full-year 2017 and Q1 2018 financial statements after the regulatory due date, are in accordance with the provisions of Section 14 of Appendix 111 of the listing rules.
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