The Nigerian Exchange Limited (NGX) has levied fines totaling N90.7 million on thirteen listed companies for their failure to submit their quarterly interim financial statements within the stipulated regulatory timeframe.
These sanctions were imposed during the year 2023, and they primarily relate to the companies’ inability to meet the regulatory requirements during the first and second quarters of the year.
The affected companies include Thomas Wyatt Nigeria Plc, Royal Exchange Plc, Flour Mills of Nigeria Plc, Honeywell Flour Mills Plc, and Presco Plc, among others.
The market operators have hailed the sanctions as a significant move towards ensuring better adherence to the rules of listing on the NGX. Such measures are expected to lead to more accurate pricing of securities and enhance investor confidence in the market.
Mr. Mike Eze, the Managing Director of Crane Securities Limited, sees this action by NGX as a positive development that will boost investor confidence. By penalizing companies for non-compliance, it sends a strong signal regarding the need for timely financial reporting, which is crucial for informed investment decisions.
Eze emphasized that investors rely on accurate financial reports to make informed choices about which stocks to buy, and this can only be achieved if quoted companies adhere to good corporate governance practices.
Sir. Sunny Nwosu, the founder of the Independent Shareholders Association of Nigeria (ISAN), expressed support for the sanctions. He highlighted the importance of shareholders understanding the financial health of the companies they invest in, which requires timely financial reports.
The President of the Progressive Shareholders Association, Mr. Boniface Okezie, also commended the penalties imposed on non-compliant companies. He emphasized the significance of enforcing rules that ensure post-listing requirements are met. This move, Okezie believes, will lead to more accurate pricing of securities, increased confidence in NGX’s regulatory capacity, and enhanced market integrity.
Alhaji Gbadebo Olatokunbo, a founding member of Nigeria Shareholders Solidarity Association and a leading shareholder activist, stressed the importance of abiding by rules. He noted that sanctions would encourage companies to fulfill their obligations promptly, allowing investors, analysts, and stockbrokers to better assess the real value of the companies.
The Exchange, in its X-Compliance report, explained that this initiative aims to maintain market integrity and safeguard investors by providing compliance-related information on all listed companies. Companies listed on the Exchange are required to adhere to high disclosure standards, ensuring periodic financial information and ongoing material events are disclosed in a timely manner. This enables NGX to efficiently function in maintaining an orderly market.
In light of these recent penalties, companies may be more inclined to comply with their obligations, ensuring that investors have access to accurate and timely financial information, ultimately fostering a healthier and more transparent marketplace.