- Seven companies' stocks have been placed on suspension by the Nigerian Exchange after they failed to publish their financial results
- As a public company, they were supposed to submit their financial result for the previous year, quarter
- The affected companies are most financial institutions also, including Ardova, a top operator in the downstream sector
The Nigerian Exchange has announced the suspension of shares of eight public listed companies over failure to submit their financials.
The affected companies, according to a circular published by NGX include are Niger Insurance Plc, Ardova, African Alliance Insurance Plc, Royal Exchange Plc, Ekocorp Plc, and C&I Leasing Plc.
Others are Mutual Benefits Assurance Plc, Coronation Insurance Plc, Premier Paints Plc. Trading on their shares was suspended indefinitely by the capital market authorities effective July 1, 2022.
The suspension, which takes effect from yesterday, July 1, 2022, implies that there would be no price movement on the shares because the company’s investors would no longer trade on their stocks.
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This will therefore have a negative impact on their shareholders investment, eliminating the possibility of growth.
The regulatory sanction could also trigger a sell off among investors, which will further reduce investment value.
Details of the suspension
In the disclosure, the NGX stated that its action was based on Rule 3.1, Rules for Filing of Accounts and Treatment of Default Filing (Default Filing Rules), the Guardian reports.
The law empowers the bourse to suspend trading in defaulter’s stocks if it “fails to file the relevant accounts by the expiration of the cure period.
Also, within 24 hours after placing a suspension on the trading in the shares of any defaulting public firm, the NGX must “notify the Securities and Exchange Commission (SEC) and the market.”
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In the circular, the bourse declared that “trading in the shares of nine companies (above) been suspended from the facilities of the NGX effective today, Friday, July 1, 2022, having failed to file their Audited Financial Statements for the year ended December 31, 2021.”
However, it emphasized that “the suspension of trading in the shares of the above-mentioned companies will only be lifted upon the submission of the relevant accounts, provided NGX Regulation (NGX RegCo) Limited is satisfied that the accounts comply with all applicable rules of NGX.”
Companies provide explanation
In response to the suspension, Ardova Plc said that the delay in submitting its financial statement for the year ended December 31, 2021 was occasioned by the process of reconciliation of its accounts following the acquisition of Enyo Retail and Supply Limited (ERSL) late last year by the company.
African Alliance Insurance Plc and C&I Leasing also provided explanations on why they delayed.
African Alliance, in a statement, said it was due to the company’s inability to receive the Financial Statements of one of its off-shore subsidiaries.
Dangote Cement leads the list of the 10 biggest companies
Meanwhile, Legit.ng had earlier reported that Dangote Cement and MTN Nigeria are the two biggest publicly listed companies in Nigeria as of October 2021.
The two firms are among the five biggest companies in the exclusive club of over N1 trillion market capitalization.
Using data from Nigeria Exchange, the report showed how much each of the top firms is worth and their share price for anyone looking to invest.