The Nigerian Stock Exchange (NSE) boosted its revenue with N150 million from fines imposed on listed companies across the banking, manufacturing, and insurance sectors, among others, between 2018 and the first quarter of 2020. This is contained in the X-compliance report obtained by Nairametrics from the Stock Exchange.
The report disclosed that five firms were fined over N6.1 million for unauthorised publication of notice of board meetings, annual general meetings, and a notice of resignation of four directors.
About 25 other firms were asked to pay about N148 million fine for non-disclosure of material information, and failure to file their financial statements by the due date.
Why it matters: Every listed company is required to provide the Exchange with timely information to enable it efficiently perform its function of maintaining an orderly market.
In accordance with the provisions of Appendix III: General Undertaking (Equities), Rulebook of The Exchange, 2015 (Issuers’ Rules) and The Exchange’s Circular No. NSE/LARD/LRD/CIR3/17/05/12 on Publication of Announcements or Press Releases via The Issuers’ Portal, listed companies are required to obtain prior written approval from the Exchange before publications that affect shareholders’ interests are made in the media or via the Issuers’ Portal.
Details: For unauthorised publication, Access Bank Plc, Diamond Bank Plc, Prestige Assurance Plc, and First Aluminium Nigeria Plc were fined N2.205 million, N3.087 million, N496,125 and N476,280, respectively.
For non-disclosure of material information, Access Bank Plc, Diamond Bank Plc, and First Aluminium Nigeria Plc were fined N4.410 million, N3.234 million, and N476,280, respectively. Access Bank and the defunct Diamond Bank were penalised for non-disclosure of resolutions passed at their board meetings, while First Aluminium was penalised for non-dispatch of the notice of its annual general meeting and annual reports to shareholders 21 days before the date of the meeting.
Failure to file financial statements: Anino International, Deap Capital Management, Grief Nigeria Plc, Union Bank Nigeria Plc, Afromedia Plc, Conoil Plc, Lasaco Assurance Plc, Flour Mills of Nigeria Plc, Universal Insurance Plc, Thomas Wyatt Nigeria Plc, and others were fined. In this category, Anino International got the highest fine of N41.1 million as it failed to file its financial statements since 2015.
R.T Briscoe was fined N31.3 million for the delay in filing its 2018 audited financial statement, first and second quarter of 2019 financial statements.
Niger Insurance and Guinea Insurance were fined N19.8 million and N19.2 million, respectively, for failing to file their full-year 2018, first quarter 2019 and second quarter 2019 financial statements as at when due.
Royal Exchange, Thomas Wyatt and Lasaco Assurance were respectively fined N8.9 million, N4.9 million and N1.4 million, for failing to file their audited 2018 and first quarter 2019 financial statements, while Universal Insurance got a fine of N5 million for failing to audit 2018, first and second quarter 2019 financial statements.
NSE slammed N800,000, N200,000, N400,000 and N400,000 fines on Grief Nigeria, Union Bank, Afromedia and Conoil for the delay in filing their 2018 financial statements.
Flour Mills of Nigeria, Access Bank and Interlinked Technologies received respective penalties of N1.2 million, N700,000 and N200,000 for failing to file financial statements for the first quarter, second quarter and second quarter of 2019 respectively.
Meanwhile, some shareholders of the companies, who spoke with our analyst in separate interviews, praised the management of the Stock Exchange for being strict on its compliance exercise, as they called for the punishment of erring companies.
National President, Constance Shareholders Association of Nigeria, Shehu Mikail, agreed that the companies should be fined but urged the Exchange to ensure that such fines were not deducted from the shareholders’ fund, which to him, would create holes in the investment pockets in the companies.
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