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NGX suspends eight companies for failing to file audited financial statements for 2023

NGX suspends eight companies for failing to file audited financial statements for 2023

NGX suspends eight companies for failing to file audited financial statements for 2023

Image Source: Nairametrics File

The Nigerian Exchange Limited (NGX) has notified investors of the suspension of trading in shares of eight companies listed on its platform.

The announcement was made in a press release seen by Nairametrics.

According to NGX, the suspension, which came into effect from Monday, July 8, 2024, is due to the failure of these companies to file audited financial statements for the fiscal year ended December 31, 2023.

The affected companies are: Guinea Insurance Plc, Lasaco Assurance Plc, Mutual Benefits Assurance Plc, C & I Leasing Plc and NPF Microfinance Bank Plc.

Additionally, the operations of Regency Alliance Insurance Plc, Secure Electronic Technology Plc and Unity Bank Plc have also been suspended.

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The statement reads:

According to a statement signed by Godstime Iwenekhai, Head of the Listing Regulation Department, NGX said:

“Trading licensees and investors are hereby notified that pursuant to Rule 3.1, Rules for Filing Accounts and Treatment of Filing Defaults (Default Filing Rules), which provides that: “If the Issuer fails to file the appropriate accounts by the expiration of the Cure Period, the Exchange will: a) Send the Issuer a “Second Notice of Failure to File” within two (2) business days after the expiration of the Cure Period; b) Suspend trading in the Issuer’s securities; and c) Notify the Securities and Exchange Commission (SEC) and the Market within twenty-four (24) hours of the suspension,”

“Trading in shares of eight (8) companies on the Nigerian Exchange Limited (NGX) has been suspended with effect from Monday, July 8, 2024, as they have not filed their audited financial statements for the financial year ended December 31, 2023.

“In accordance with the rules for filing default documents set out above, the suspension of trading in the shares of the above-mentioned companies will be lifted only after the relevant bills have been filed.”

What market operators said

Market operators agreed that sanctions for non-compliance with NGX listing rules are welcome as they will lead to more appropriate pricing of securities. More listed entities will be forced to provide timely information to the market.

The Managing Director of Crane Securities Limited, Mr. Mike Eze, commenting on the development following a Nairametrics inquiry, said the action of NGX will boost investor confidence in the market as it sends a signal that investors must receive companies’ financial reports on due dates.

He added that investors need to make informed decisions before choosing the stocks they want to buy and this can only be achieved if listed companies follow the principles of good corporate governance.

Independent Shareholders Association of Nigeria (ISAN) founder Sir Sunny Nwosu noted that affected companies were to ensure they were compliant as it would help shareholders understand their financial health in the context of investment decisions.

“This is nothing new and it does not come as a surprise to us. We have been writing to the stock exchange and raising the issue at annual general meetings that there is a need to know the status of these companies so that we can take an investment position,” he noted.

Also speaking, the Chairman of the Progressive Shareholders Association, Mr. Boniface Okezie, said it is better for Nigerians to have a few companies that are willing to comply with the rules than to have all the companies in the world that are not ready to comply with the post-listing requirements.

Okezie said penalising companies for non-compliance with NGX listing rules is a positive development as it will lead to more appropriate valuation of securities.

He added that more entities will be required to provide information to the market in a timely manner, and investor confidence in the regulatory capabilities of NGX and the market will increase.