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NSE Raises Red Flag on 34 Firms, Issues Caveat

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Nigerian Stock Exchange (NSE) has placed cautionary red alerts on 34 companies for their inability to meet listing requirements, implying underlying corporate governance weaknesses that investors need to consider about the companies, according to the Nation.

 

The latest tracker on compliance with basic listing requirements at the stock market indicated that the companies were flagged by the NSE for failure to submit their financial statements within the stipulated timeline.

 

The Exchange stated that the identified companies “fell short of the minimum listing standards in terms of timely disclosure of their audited annual financial statements”, a major infraction that directly affects the market’s efficient price discovery and liquidity.

 

According to the Exchange, the 34 companies failed to submit their financial statements and accounts for the first quarter of this year, ended March 31, 2019, in contravention of the extant listing requirements at the market.

 

Post-listing rules at the NSE require quoted companies to submit interim or quarterly report not later than 30 calendar days after the end of the relevant period. Most quoted companies, including banks, major manufacturers, oil and gas companies, breweries and cement companies use the 12-month Gregorian calendar year as their business year. The deadline for the first quarter, which ended March 31, 2019 was Tuesday, April 30, 2019.

 

Quoted companies are also required to publish the financial statement within five business days after the date of filing, in at least one or two national daily newspapers, and post it on the company’s website, with the web address disclosed in the newspaper publication.

 

Also, an electronic copy of the publication shall be filed with the Exchange on the same day as the newspaper publication. Where the company chooses to audit its quarterly accounts, it shall be required to file such accounts not later than 60 calendar days after the relevant quarter.

 

The report, which was based on the Compliance Status Indicator (CSI) of the NSE, uses three-letter codes to mark out companies that fall below the post-listing requirements at the Exchange and it is usually part of the consideration for regulatory reviews and approvals at the Exchange.

 

The companies flagged with the red-alert warning codes included Lafarge Africa Plc, Lasaco Assurance Plc, Mutual Benefits Assurance Plc, Niger Insurance Plc, Aso Savings & Loans, Capital Oil, Conoil, Cornerstone Insurance, Daar Communications, Deap Capital Management & Trust Plc, DN Tyre & Rubber Plc, Evans Medical Plc and A.G Leventis Nigeria Plc.

 

Others were Anino International Plc, First Aluminium Nigeria Plc, Fortis Microfinance Bank Plc, FTN Cocoa Processors Plc, Goldlink Insurance Plc, Guinea Insurance Plc, International Breweries Plc, International Energy Insurance Plc, Juli Plc, NPF Microfinance Bank Plc, Omatek Ventures Plc, RT Briscoe Plc, Resort Savings & Loans Plc, Royal Exchange Plc, defunct Skye Bank, now Polaris Bank; Smart Products Nigeria Plc, Staco Insurance Plc, Standard Alliance Insurance Plc, Unic Diversified Holding Plc, Union Homes Savings & Loans Plc and Universal Insurance Company Plc.

 

Besides the warning red flags, the companies are also required to pay monetary fines for the defaults. While authorities at the Exchange have not indicated the actual amounts payable by the companies, the report noted that “the sanctions for non-compliance with periodic financial disclosure obligations are clearly spelt out in the rules”.

 

Monetary sanctions could range from N100,000 to N100 million. Under the rules at the Exchange, late submission under the first instance of 90 days could attract N9 million, the additional period of 90 days will attract N18 million while such delay beyond the first 180 days to the next 180 days could attract as much as N72 million, bringing fines payable by a defaulting company within a year to N99 millio


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E-Financial

Nigerian Manufacturing Sector Contracts for 5th Consecutive Month – CBN

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The Manufacturing Purchasing Managers’ Index (PMI) in September stood at 46.9 index points, indicating a contraction in the Nigerian manufacturing sector for the fifth month.

This was disclosed by the Central Bank of Nigeria (CBN) in its September PMI report released last week.

According to the report, four out of the 14 sub-sectors surveyed reported expansion (above the 50 per cent threshold) in September.

It listed the expansion order as electrical equipment; transportation equipment; cement and nonmetallic mineral products.

It said the remaining sub-sectors reported contractions in the following order: petroleum & coal products; primary metal; furniture & related products; printing & related support activities; food, beverage & tobacco products; textile, apparel, leather & footwear; chemical & pharmaceutical products; fabricated metal products and plastics & rubber products; while the paper product sub-sector was stable.

Production

At 47.3 points, the production level index for the manufacturing sector indicated contraction in September for the fifth consecutive month.

Of the 14 sub-sectors surveyed, five recorded increased production level, one reported same level of production, while eight recorded declines in production.

New Orders

At 46.4 points, the new orders index also contracted in September for the fifth consecutive month. Six sub-sectors reported expansion in new orders, while the remaining eight recorded contraction in the month.

Supplier Delivery Time

The manufacturing supplier delivery time index stood at 53.5 points in the month, indicating a faster supplier delivery time for the fifth time.

Six of the 14 sub-sectors recorded improved suppliers’ delivery time, five reported same level, while three recorded slower delivery time

Employment Level

The employment level index stood at 44.1 points, indicating contraction in employment level for the sixth consecutive month.

Of the 14 sub-sectors, two recorded growth in employment, three recorded same level of employment, while the remaining nine recorded lower employment level in the review month.

Raw material Inventories

The manufacturing sector inventories index also contracted for the sixth consecutive time in September to 43.0 points. Four of the 14 sub-sectors recorded growth in inventories, while the remaining 10 recorded lower raw material inventories.


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FG Sacked IST Members over Fraud- Ahmed

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Mrs Zainab Ahmed, minister of Finance Budget and National Planning, has said the Federal Government sacked some past members of the Investments and Securities Tribunal (IST) as they indulged in corruption.

FG Sacked IST Members over Fraud- Ahmed

Inaugurating the new members, the minister charged the new members to eschew corruption and be forthright.

Bar. Azi Amos Isaac was appointed as Chairman for a five year term and Bar. Nosa Smart Osemwengie, was re-appointed as member for a second term of four years.

“The problem with the tribunal has been infighting amongst members, lack of industrial harmony and series of complaints bordering on maladministration.

“This has been the bane of the tribunal and a source of embarrassment not only for the Ministry of Finance but for the government in general,” Ahmed said.

The new chairman, Azi, assured the finance minister that, “the teething issue of restiveness has been addressed since he assumed duty,” adding that, “The place is calm and the staff have become very supportive.”

Azi said since 2003, the tribunal has “given judgment in the value of assets worth over N844 billion and that from 2017 to date, they have given decisions in monetary value totalling over N28bn.

“It has not failed in its adjudicatory responsibility.

“It has carried out its assignment with candour and integrity and intends to improve on what has been on ground.”

 


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CBN Bans Customer-to-Customer Forex Transfer

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Central Bank of Nigeria (CBN) has banned transfer of foreign exchange (forex) from one customer to another.

CBN Bans Customer-to-Customer Forex Transfer

According to the apex bank, forex cash lodgements into domiciliary accounts can only be done by the account owners henceforth.

An internal memo available in the media space explains that the new guidelines are necessary to review the utilisation of inflows into customers domiciliary accounts.

The circular states: “Forex inflows cannot be credited to customers until the legitimacy of funds is established.

“They can have unfettered access by telegraphic transfers up to a limit of $40,000 monthly for payment of medical bills, school fees, subscription to professional bodies subject to existing CBN guidelines.

“Transfers from one customer to another is prohibited. Transfer within related companies is allowed subject to a limit of $50,000 per month.”

It recommended that proceeds from non-oil exports should be sold to banks, used for repayment of dollar term loans, and self-utilisation for trade transactions for LC, bills and Form A.

Also oil export proceeds from E&P companies are to be used to pay contractors and service providers employed by the oil companies in addition to the recommended uses for non-oil FX proceeds.

Offshore forex inflows from other Nigerian banks and internal account to forex transfers sourced from offshore inflows are to be used for trade transactions subject to eligibility for E-Form M.

“Upon confirmation of the legitimacy of the inflows, customers can have unfettered access, subject to a maximum of $50,000,” the document read.

“Utilisation for trade transactions subject to processing of eligible trade transactions using E-Form M. Payment for services must be backed with demand note from offshore beneficiary and other regulatory documents.

“Related party transfers are allowed to the maximum of the inflow received. The transfer request should be backed by a signed instruction from the account holder.” Payment of government fees and levies are also allowed to the maritime, oil and gas, aviation. government parastatals and export processing zones.

 


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