40 listed insurance, coys fined N1bn over infractions

Forty companies listed on the floor of the Nigeria Exchange Limited (NGX) have been fined a cumulative N1 billion due to different market infractions since 2020 to date.

Daily Trust analysis indicates that eight of these companies were Insurance firms and were fined a cumulative total of N195.5 million.

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Details of the fines were obtained from the X-Compliance report published 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 that are listed on the NGX are required to adhere to high disclosure standards 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 a periodic disclosure, as well as ongoing material information disclosure should be released to the Exchange in a timely manner to enable it efficiently perform its function of maintaining an orderly market. The X-Compliance Report is updated every Friday at the close of the market.

Most of the fines are for infractions bordering on the failure of companies to file their audited and interim financial statements after the regulatory due date.

Companies listed on the Exchange are required to file their quarterly accounts within 30 days after the end of the quarter in accordance with the Rules for Filing of Accounts and Treatment of Default Filing, Rulebook of the Exchange (Issuers’ Rules). Details of the quarterly filings can be downloaded from the released financials on the website.

The sanctions for non-compliance with periodic financial disclosure obligations are clearly spelt out in the Rules for Filing of Accounts and Treatment of Default Filing, Rulebook of the Exchange.

Based on the different sectors listed on the exchange, the insurance sub-sector recorded the highest number of defaulters with eight Insurance firms making the list.

The defaulters include: Niger Insurance fined N64.4m, African Alliance Insurance N40.7m, Royal Exchange N29.7m, LASACO Assurance N25.6m and Universal Insurance 15.9m.

Others are Mutual Benefits Assurance N7.9m, Coronation Insurance N6.8m and Cornerstone Insurance N4.5m.

However, the list indicated that Omatek Ventures, a Nigeria-based holding company with interests in subsidiaries and associates involved in manufacturing, distribution, selling, and servicing of computer equipment, as well as engineering services, recorded the highest singular fine of N499.8m, nearly 50 percent of the total N1bn fines.

The record revealed that the company was in default of the exchange rules consistently from 2015 to 2018, attracting fines of N18.2m (2015), N299.4m (2016), N182.2m (2017) and N37.4m (2018).

Recall that the Nigerian Exchange in February 2020 lifted the suspension placed on the shares of Omatek Ventures Plc, one of the 17 companies suspended for failure to meet the deadline for accounts submission.

Another firm, Juli Plc, which markets a range of pharmaceutical products to the wholesale and retail sectors in Nigeria as well as owning and operating its own supermarkets and trading stores, attracted N70.2m fines for infractions between 2015 to 2020.

Juli Pharmacy Plc which originally marketed international pharmaceutical brands but diversified its positioning to produce its own brands of products was fined N19.4m in 2015, N14.3m in 2016, N9.0m in 2017, N2.9m in 2018 and N24.6m in 2020.

The banking sector did creditably as only three banks were fined for infractions.

Access Bank Plc was fined N2.2m for infraction around notice of meeting in 2020 while Unity Bank and Nigerian Police Microfinance Bank were fined N1.9m and N1.6m, respectively for failing to meet the deadline for the 2020 annual report.

United Bank for Africa (UBA), Jaiz Bank, Union Bank, Unity Bank and Fidelity Bank were asked to undertake a Mandatory Compliance Training (MCT) for minor infractions.