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2010 accounts: NSE sanctions Union Homes, Costain, 11 others

BY MICHAEL EBOH

The Nigerian Stock Exchange, NSE, has sanctioned Union Homes Savings and Loans Plc, Union Dicon Salt Plc, Costain (West Africa) Plc, G.Cappa Plc and nine other companies for their failure to meet up with its post-listing requirements.

The companies were placed on full suspension for failing to submit their December 2010 and March 2011 year end financial statements.

A breakdown of the companies affected shows that the Insurance, Packaging and Construction sub-sectors were the most hit, with two companies from each of the sub-sectors and one each from the Chemical & Paints, Food/Beverages and Tobacco, Footwear, Industrial /Domestic, Information and Communication Technology, Petroleum (Marketing) and the Mortgage sub-sector sub-sector.

The companies that were placed on full suspension for their failure to submit their December 2010 financial statement are: IPWA Plc, Union Dicon Salt, Lennards Plc, Aluminium Manufacturing Company of Nigeria Plc, African Alliance Insurance Plc, MTI Plc, Investment and Allied Assurance Plc, West African Glass Industries Plc and Afroil Plc.

On the other hand, Union Homes Savings and Loans, Costain (West Africa) Plc, G.Cappa Plc and Poly Products Plc were suspended for their failure to submit their financial statements for the year end, March 2011.

With the sanction by the NSE, trading will be suspended on the shares of the companies.

The NSE had in a statement on the refusal of certain companies to render their financial statements at the appropriate time, said failure of companies to submit their financial statements at the expiration of the accounting year, is a clear violation of the Post-Listing Rules of the NSE, as contained in Key Issue No. 5 (Annual Accounts Procedures), which states that ‘Audited annual accounts of companies ought to be submitted within three months of the year end.’

According to the Exchange, the NSE and the investing public need timely financial information from listed companies in other to facilitate stock transactions that are based on market fundamentals.

The NSE said this is essential for fair price discovery and investor confidence in the capital markets.

With the exception of Union Homes, Costain and Poly Products, all the other companies were sanctioned in July 2011, when the NSE started the strict enforcement of its post-listing rules, especially in the area of non-rendition of financial statements by quoted companies.

The NSE had in July 2011 placed 48 companies on technical suspension for the non-rendition of their accounts for the 2010 financial year. The companies were given one month to present their financial statements, failure in which their shares will be placed on full suspension.

On the expiration of the one month grace, the NSE, in August 2011, placed 24 companies on full suspension, out of the 48 earlier placed on technical suspension.


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