BY NKECHI NAECHE—--Five insurance companies listed on the floor of the Nigerian Stock Exchange are among companies that are flouting the post listing requirement of the Exchange.
At the last count companies such as Veritas Capital Assurance Plc; African Alliance Insurance Plc; Staco Insurance Plc; Standard Alliance Insurance Plc and Niger Insurance Plc are yet to disclose their interim and audited financial performance 2017 under the minimum listing requirement of the NSE.
These five insurance companies are yet to get their 2017 financial accounts approved by the National Insurance Commission (NAICOM) thirteen days to the deadline, making it impossible for them to meet the 30th June deadline set by NAICOM.
NSE listing requirement mandates listed companies to submit their quarterly financial statement, not later than one month after the last day of the quarter. It also mandates companies to submit their audited annual financial statements not later than three months after the last working day of the financial year. .
According to NSE rules, “Any late submission of accounts shall attract a fine of One Hundred Thousand Naira (N100, 000) per week from the due date until the date of submission. A listed company which contravenes any of the provisions of the Listing Rules and General Undertaking and fails to pay the penalty imposed on it for such contravention on or before the due date shall be liable to a further fine of Three Hundred Thousand Naira (N300,000) in addition to Twenty Five Thousand Naira (N25,000) per day for the period the violation continues.”
While NAICOM on its part said companies that are yet to submit their accounts will have to pay a daily fine of N5,000 for failing to meet the June 30 deadline for submission of their 2017 accounts pending when they submit their accounts.
NAICOM regulation requires insurance firms to submit their financial statements on or before June 30th every year, else they would be barred from engaging in further business activities
The Commission maintained that the decision to impose sanctions on defaulting companies became necessary, as their action deprives the Commission, policyholders, insurance intermediaries, analysts and other stakeholders of the relevant information about their performance and financial conditions.
According to information sourced from the official site of the Exchange Veritas Capital Assurance, African Alliance Insurance, standard Alliance, Niger Insurance, Staco Insurance are among others has failed to submit its audited financial account ended 31, December 2017 and unaudited 31, March 2018 respectively.
Defaulted Companies in 2017
The companies that defaulted and were fined by NSE in 2017 are as follows: Niger Insurance Plc, (Audited Account 2016 and First Quarter 2017, N16.1 million); Staco Plc (Audited Account 2016 and First Quarter 2017, N7.5million); African Alliance (Audited Account 2015, 2016 Account, N46.1million) and Standard Alliance Insurance Plc (Audited Account 2016, N8.2 million).
A Stockbroker who spoke on condition of anonymity, called on shareholders to hold the management of their companies accountable for the such fines.
According to him if the shareholders begin to ask relevant questions why their accounts are submitted late or not filed at all to the regulatory authorities, the management will begin to seat up in their responsibilities, adding that such fines if channeled as dividends, shareholders would be better for it.
Speaking on the implication, he said the excess of the Veritas Capital Assurance rebranding is defeated, since the company is not living up to expectations as required by both regulator.
” I believe rebranding is all about new ideas, creativity and doing things better than it was. So why the rebranding if you know it will not affect your account submission positively.? Rebranding should affect every area of the business. As a stockbroker on the exchange, I say it with all sincerity there is nothing new about these insurance companies we just talked about. The fines will continue until the shareholders begin to hold their board and management accountable till that happens we are not going anywhere.
On African Alliance he said, “is a big minus for company especially with the acquisition of 60 percent of its stake by Williamsville Sears Management and the payment of N46.1 million last year for the same issue. What excuse do they have to give this time.?”
Mrs. Bisi Bakare, Chairman, Pragmatic Shareholders Association of Nigeria, said “my advice is that those officers of the companies assigned to process returns should do so as at when due to avoid unnecessary penalties. Also, our regulatory authorities should know that the burden or consequences of penalty is borne by shareholders. This is because the aftermath effect is that topline and bottomline will definitely be affected and dividend proposed will decline and the working capital of these companies will also affected.
“On this note, I want our regulators to temper justice with mercy, by looking at other ways to punish these companies that flout listing rules than monetary fine so that our investment will not be affected. The regulators in the banking, capital market and insurance sectors (CBN, SEC, NAICOM) should be up and doing in their responsibilities because most times it is when one regulator or the other does not complete their work on time that it affect prompt filling of results by companies to the NSE.”
Mr. Boniface Okezie, Chairman, Progressive Shareholders Association of Nigeria, PSAN, said “The NSE need to further carry out investigation why these companies have failed to meet regulatory requirement. Imposing of fine is not the best, as this action affects the owners of the companies (shareholders) and not the management. It is only when such action is taken and the company fails to provide reasonable reason that a fine could be imposed; and the fine should be imposed on all the officers responsible to turn in the results and not to the firm itself. Also, the Exchange and other regulators should compel companies to state reason for late fillings of results in their annual reports. This will enable shareholders to tackle and hold the management responsible during Annual General Meetings, AGMs .
Mr. Moses Igbrude, Public Relations Officer, Independent Shareholders Association of Nigeria, ISAN, said “There are rules and regulation in our market and operators must abide by them. So, management of companies should be aware of the rules and penalties involved. The management, as our Association always tells them, is to guide against being penalised.