BY NKECHI NAECHE-ESEZOBOR–Days after BusinessToday Online reported the failure of African Alliance Insurance Plc to file both its unaudited first quarter statement for the period ended 31st March,2020 and audited financial statement for the period ended 31st December, 2019 to the Nigerian Stock Exchange (NSE), the National Insurance Commission (NAICOM) has said that late submission of accounts by African Alliance Insurance is responsible for the late approval.
Source close to the commission disclosed this to BusinessToday Online, that African Alliance Insurance Plc only submitted its annual financial statement for the period ended 31st December, 2019 on June 1, 2020 to the commission.
According to the commission most companies that submitted their accounts on time have been approved by the commission for onward filing to the exchange.
The source added “If African Alliance Insurance accounts has not been approve, then something is responsible and that thing that is responsible will be from African Alliance.
He added that they are not the only company that submitted their annual accounts to the commission. All those that have submitted on time have been approved.
“If you don’t have any issue the commission will approve your account within 24 hours.
But if you have issues and you are queried, is for you to respond to those queries. At the time in which you respond to those queries is at your own discretion.”
He stressed that the time a company submitted its account matters a lot, adding that the commission has approved accounts of some companies listed on the stock exchange and some have Commenced plans for the annual general meeting.
He urged operators to take timing seriously when it comes to their financial accounts to avoid sanctions from regulatory authorities.
It would recalled African Alliance Insurance Plc in a notice to the exchange requested for approval for extension of time to file its audited financial statement for the period ended 31st December, 2019 and First Quarter Unaudited Financial Statements (UFS) for the period ended 31st March, 2020.”
The company attributed the delay in filing the aforementioned accounts is due to the fact that the Company is still awaiting approval of its primary regulator, the National Insurance Commission (NAICOM) on the said accounts.
According to the NSE, company that failed to file its accounts for the period as expected is marked out by the Exchange as a corporate governance failure, which attracts monetary fines, “naming and shaming” tag, suspension of shares from trading and delisting in incurable cases of default.
Under the listing rules, a late submission attracts a fine of N100,000 daily for the first 90 calendar days of non-compliance, another N200,000 per day for the next 90 calendar days and a fine of N400,000 per day thereafter until the date of submission.
With these, late submission under the first instance of 90 days could attract N9 million, the additional 90 days will attract N18 million while such delay beyond the first 180 days to the next 180 days could attract as much as N72 million, bringing fines payable by a defaulting company within a year to N99 million.
The list of sanctions shows fines ranging from a low of N0.1 million to as high as N51.4 million. Companies had been fined more than N400 million and N500 million in 2016 and 2017 respectively for failure to submit accounts within scheduled periods.
We hope that African Alliance will do the needful to avoid unnecessary fines that can be channel as dividend for shareholders.