The Nigerian Exchange Limited (NGX) has notified the investing public of the suspension of trading in the shares of eight companies quoted on its platform.
This notification was provided through a press release. According to the NGX, the suspension was due to the companies’ failure to file their audited financial statements for the year ended 31 December, 2023. The affected companies are Guinea Insurance Plc, Lasaco Assurance Plc, Mutual Benefits Assurance Plc, C & I Leasing Plc and NPF Microfinance Bank Plc.
Additionally, Regency Alliance Insurance Plc, Secure Electronic Technology Plc and Unity Bank Plc were also suspended.
According to the statement signed by Godstime Iwenekhai, Head of Listings Regulation Department, the NGX noted that “trading license holders and the investing public are hereby notified that pursuant to Rule 3.1, Rules for Filing of Accounts and Treatment of Default Filing (Default Filing Rules), which provides that if an issuer fails to file the relevant accounts by the expiration of the ‘cure period’, the Exchange will either send to the issuer a second filing deficiency notification within two business days after the end of the cure period or suspend trading in the issuer’s securities and notify the Securities and Exchange Commission (SEC) and the market within 24 hours of the suspension.”
“Trading in the shares of the eight companies has been suspended from the facilities of Nigerian Exchange Limited (NGX), having failed to file their audited financial statements for the year ended 31 December, 2023.
“In accordance with the default filing rules set forth above, the suspension of trading in the shares of the above-mentioned companies will only be lifted upon the submission of the relevant accounts”. Market operators agreed that the sanction for non-compliance with the rules of listing on NGX is a welcome development, as it will lead to a more appropriate pricing of securities. More quoted entities would be compelled to give information to the market on a timely basis.
The Managing Director of Crane Securities Limited, Mr. Mike Eze, while reacting to the development, said the action of NGX would boost investor confidence in the market because it is sending a signal for the need for investors to get companies’ financial reports as at when due. He added that investors needed to make informed decisions before choosing which stock to buy and this can only be achieved if there is adherence to good corporate governance by the quoted companies.
The founder of the Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu, noted that the affected companies were supposed to have ensured that they met the requirements as such would help shareholders to understand their financial health for investment decisions.
“It is not a new thing and it does not come to us as a surprise. We have constantly written to the exchange and raised the issue at annual general meetings that there is a need to know the status of these companies to enable us to take investment position”, he noted.
Also, the President, of Progressive Shareholders Association, Mr. Boniface Okezie, said it was better for Nigerians to have a few companies that are ready to play by the rules than to have all the companies in the world that are not ready to satisfy post-listing requirements. Okezie said that penalizing companies for non-compliance with the rules of listing on NGX was a welcome development, as it will lead to more appropriate pricing of securities.
He said more entities would be compelled to give information to the market on a timely basis, adding that investor confidence in the regulatory capacity of NGX and the market would be enhanced.
