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NSE queries banks for publishing unaudited accounts

By Omoh Gabriel, Business Editor & Babajide Komolafe
LAGOS—Capital market authorities have raised query on the unaudited accounts published by some of the troubled banks.
The Nigeria Stock Exchange, NSE, in particular, is irked by the fact that some of the banks went ahead to publish their accounts without its approval. In a letter to some of the banks, NSE said it was dismayed by the action of the banks.

According to the letter to one of the affected banks sighted by Vanguard, the management of the Exchange said: “We have noted with dismay, a publication in the media where you published your unaudited financial statement for the period ended September 30, 2009, without our approval.

“This is a violation of our post-listing requirements they relate to changes in companies’ directorates and publication of material information.

“Consequently, you are hereby fined the sum of N… being 20 per cent of your annual listing fee. Your cheque should be forwarded to the Exchange before December 20, 2009,” the letter said.

Confirming the development, an official of the Exchange said the banks were being sanctioned for breaching post-listing requirements. He added that the post-listing requirement requires listed companies to inform the Exchange before they publish their results.

Banks acted on CBN’s order

Acting on the directives of the Central Bank of Nigeria, CBN, the eight troubled banks published their third quarter results last week.

CBN had given them till last weekend to publish the results. The results released showed that  six of the eight banks rescued by the apex bank have declared a loss of N1.3123 trillion while N1.3493 trillion was recorded as provisions for bad debt.

CBN, in a statement, explaining the loss in troubled banks noted that: “Following more detailed investigations, the new management of these banks found the situation in a number of the affected banks to be worse than had been originally thought.

A number of issues only came to light after the CBN had put in place new management teams who therefore had access to greater and more up to date information.

As a result of these findings, the banks had to make provisions over and above the CBN’s initial recommendations.”

Addressing concerns generated by the results declared by the banks, the CBN Governor, Malam Sanusi Lamido, said in Enugu, “”There is nothing to worry about.  Our total national debt is only 11 per cent of GDP. If you put the two together it will still be less than 14 per cent of total GDP compared with 70 to 60 per cent of other countries like South Africa.

Sanusi on banks’ accounts

“The reason why we have the banks to declare their accounts is to enable the shareholders and creditors have a clear view of their banks’ accounts. The declaration does not mean they have moved away from where they were because they have published the numbers.

We have said several times we will not allow any bank to fail, what  that means effectively  is that we have guaranteed deposits and we are guaranteeing credits. There is nothing to worry about”.

“There is a bill on Asset Management Company, AMC, with the National Assembly on that and when it is approved, it will serve as a vehicle of revolution. It will handle toxic assets and once toxic assets is handled, that is recovery of capital.

There is nothing to worry about, the disclosure and publications is part of the progress that we are making in the sector. What you see as deficit will be recovered. We are encouraging merger acquisition among the banks and capital market activities.

Every country that had this banking crisis have handled it with fiscal support, the loan would be handled by AMC.”


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