Forty companies listed on the trading floor of Nigeria Exchange Limited (NGX) have been fined a cumulative 1 billion naira due to various market infractions since 2020 to date.
Daily trust analysis indicates that eight of these companies were insurance companies and were fined a cumulative total of N195.5 million.
Details of the fines were obtained from the X-Compliance report released by the Nigeria Exchange.
The X-Compliance Report is a transparency initiative of NGX Regulation Limited (NGX RegCo), which is designed to maintain market integrity and protect investors by providing compliance related information on all listed companies.
Companies listed on NGX are required to adhere to high standards of disclosure which are prescribed in the Rulebook of the Exchange, 2015 (Issuers’ Rules), and other rules of the Exchange, from time to time.
Financial information, which is periodic disclosure, as well as continuous disclosure of material information must be disclosed to the Exchange in a timely manner to enable it to effectively perform its function of maintaining an orderly market. The X-Compliance report is updated every Friday at the close of the market.
Most fines are imposed for offenses close to the failure of companies to file their audited and interim financial statements after the regulatory deadline.
Listed companies are required to file their quarterly accounts within 30 days of the end of the quarter in accordance with the rules for depositing accounts and handling default deposits, stock exchange regulations (issuer rules). Quarterly deposit details can be downloaded from the financial statements posted on the website.
The penalties for non-compliance with periodic financial disclosure obligations are clearly set out in the Rules for filing accounts and handling reports of default, Stock Exchange Regulations.
Based on the different publicly traded sectors, the insurance sub-sector recorded the highest number of defaults with eight insurance companies on the list.
The defaulters include: Niger Insurance fined 64.4 million naira, African Alliance Insurance 40.7 million naira, Royal Exchange 29.7 million naira, LASACO Assurance 25.6 million naira and Universal Insurance 15, 9 million.
Others are Mutual Benefits Assurance N7.9m, Coronation Insurance N6.8m and Cornerstone Insurance N4.5m.
However, the listing indicated that Omatek Ventures, a Nigeria-based holding company with interests in subsidiaries and associates involved in the manufacture, distribution, sale and maintenance of computer hardware, as well as engineering services. , recorded the highest singular fine of N. 499.8 million, almost 50 percent of the total fines N1bn.
The case revealed that the company was consistently in default of the trading rules from 2015 to 2018, resulting in fines of N 18.2million (2015), N299.4million (2016), N182.2million (2016). N (2017) and N 37.4 million (2018).
Recall that the Nigerian Stock Exchange in February 2020 lifted the suspension placed on the shares of Omatek Ventures Plc, one of the 17 companies suspended for failure to respect the deadline for submitting accounts.
Another company, Juli Plc, which markets a range of pharmaceuticals to the wholesale and retail sectors in Nigeria, as well as the ownership and operation of its own supermarkets and trading stores, has been fined. 70.2 million naira for offenses committed between 2015 and 2020.
Juli Pharmacy Plc which originally marketed international pharmaceutical brands but diversified its positioning to produce its own brands of products was fined N 19.4 million in 2015, N 14.3 million in 2016 , N 9.0 million in 2017, N 2.9 million in 2018 and N 24.6 million in 2020.
The banking sector did honorably as only three banks were fined for violations.
Access Bank Plc was fined 2.2million naira for breaching the notice of meeting in 2020, while Unity Bank and Nigerian Police Microfinance Bank were fined 1.9million naira and 1.6 million naira, respectively for failing to meet the 2020 annual report deadline.
United Bank for Africa (UBA), Jaiz Bank, Union Bank, Unity Bank and Fidelity Bank have been asked to complete Mandatory Compliance Training (MCT) for minor breaches.