Score cards: NSE warns companies over non-compliance

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BY NKIRUKA NNOROM

The Nigerian Stock Exchange, NSE, has warned that it will no longer tolerate a situation where quoted companies submit their quarterly statement of account separate from interim corporate action for a given period.

The Head, Listings Compliance, Listings Regulation Department of the NSE, Hauwa Zoaka, issued the warning while speaking at the X-Compliance and Brokers Trak training organised for capital market correspondents by the Exchange.

Corporate action is an intention of a given company to reward its shareholders with either dividend or bonus issue in a given financial period.

Zoaka noted that the practice is creating confusion in the market, insisting that any company that intends to propose either interim dividend or bonus should endeavour to do so alongside the financial statement being submitted.

She said, “Going forward, we will not take this kind of information to the market. We have told the companies that once there is board meeting, the Exchange should be notified immediately about the outcome of such meeting. Interim dividend and interim account should be submitted at the same time; otherwise, such statement will not be published.

“Failing to do that, we will tell the company to hold on to the account until such time it is ready to submit everything in details. Two months ago, two companies came up to tell us few weeks after releasing their results that the board met and decided to give interim dividend; we were not happy about that.”

On late submission of annual report and accounts by companies, she emphasised that it is mandatory for companies to submit their results three months after the year end.

Though she said that the intention of Exchange is not to penalise any company, she stated, “Any company that fails to submit its financial statement will be penalised; some of their peers submit theirs even one month after, so it will be unbecoming of another company to tell us that they cannot do the same over flimsy excuses.”

On verification of statement of accounts sent to the NSE by quoted company, Zoaka said that it is expected that quoted companies should maintain high level of integrity by submitting only financial statements they can defend.

“The Exchange does not go back to verify accounts sent to her by companies. Why will auditors audit it and we still go back to verify what the company has said? A company should do what they say, and say what they can do,” she added.

Also speaking at the event, on the compliance level of stockbrokers, Olufemi Shobanjo, Head, Broker Dealer Regulation, said that the knowledge that delinquent stockbrokers would be named and shamed has put members on their toes to ensure compliance to NSE’s rules.

He said that it has also increased competition among them.

He further stated that Brokers Trak has equally put stockbrokers under pressure to ensure timely submission of their audited financial statement in order to stay ahead of others and beat competition.

He explained that with the Brokers Trak, the NSE has set the tone for its zero tolerance initiative, adding that it is in line with transparency initiative of the Exchange.

He noted that the Brokers Trak has provided investors adequate data on the both the financial status and compliance level of their brokers to rules, saying that this would enable them to make informed decision on the firms they choose to do business with.

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