The Nigerian Exchange (NGX) has announced the suspension of trading in the shares of eight companies, including Unity Bank, due to their failure to submit audited financial statements for the year 2023. This action, effective from Monday, July 8, 2024, underscores the Exchange’s commitment to enforcing compliance with its listing regulations.
Godstime Iwenekhai, Head of the Issuer Regulation Department at NGX Regulation, disclosed the suspension in a market bulletin issued on Monday. The affected companies are Unity Bank, C&I Leasing Plc, Guinea Insurance, Lasaco Assurance, Mutual Benefits Assurance, NPF Microfinance Bank, Regency Alliance Insurance, and Secure Electronic Technology Plc.
“Trading in the shares of the eight companies below has been suspended from the facilities of Nigerian Exchange Limited (NGX or The Exchange) effective today, Monday, 8 July 2024, for not filing their Audited Financial Statements for the year ended 31 December 2023,” Iwenekhai stated.
The suspension is in accordance with NGX’s post-listing requirements, which mandate companies to submit their accounts and other relevant documents within a specified timeframe. Failure to comply with these requirements triggers regulatory actions as outlined in Rule 3.1 regarding the Filing of Accounts and Treatment of Default Filing.
According to the Default Filing Rules, if a company fails to file the required accounts by the expiration of the Cure Period, NGX will:
a) Send the issuer a Second Filing Deficiency Notification within two business days after the end of the Cure Period.
b) Suspend trading in the issuer’s securities.
c) Notify the Securities and Exchange Commission (SEC) and the market within 24 hours of the suspension.
The trading suspension will be lifted once the companies comply with the filing requirements and submit their audited financial statements.
The delay in filing the 2023 annual reports by some insurance companies is attributed to the adoption of the International Financial Reporting Standards (IFRS) 17. IFRS 17 requires companies to recognize profits as they deliver insurance services rather than when they receive premiums, providing a more accurate representation of the financial performance of insurance contracts.
This regulatory move by NGX highlights the importance of transparency and accountability in the financial markets, ensuring that investors have access to timely and accurate financial information.
By suspending the trading of non-compliant companies, NGX aims to maintain the integrity of the market and protect investors’ interests. The Exchange encourages all listed companies to adhere strictly to regulatory requirements and ensure timely submission of their financial statements.
