By Udeme Ekwere

The Nigerian Stock Exchange has said that it will punish errant quoted companies that fail to disclose their financial statements as and when due.

According to the NSE, the move became necessary because some companies constantly refuse to update their financial statements thus breaking a cardinal rule of the Exchange.

The Chief Executive Officer of the NSE, Mr. Oscar Onyema, said this at a breakfast session organised by the Nigerian-South African Chamber of Commerce on Wednesday.

He noted that the Exchange would be hard on any company which flouted the rules on disclosures of financial statements.

He said, “In the United States, we had what we called Regulation Fair Disclosure, which requires companies to make their financial disclosures on time and make sure that everyone has access to that financial information. And when companies do not do that, we had markers that we put next to the companies’ names or acronyms and this would show that such a company has not provided its financial information and everybody knows that it is trading based on stale information.

“And so, we plan to look at this in the NSE, we are going to be coming out with new policies and procedures that would be used to address failure of companies to disclose their financials timely, and one of the things we will be looking at is actually marking each security that has not provided up to date financials. We will look at more than payment of fines, to ensure that all the companies comply.

Onyema said that the NSE had plans to improve organisation efficiencies in terms of how information was processed, adding that the Exchange would also ensure a level-playing field for different market participants and ensure that existing rules were enforced.

He said, “Since we have seen that there is a lot of inflow from developed markets, because of declining returns, to the emerging markets, we need to position our market to capture a significant portion of these inflows and ensure that we have a fair and level playing field and to provide the necessary structure to ensure a deep and liquid market.

“We have been meeting with some of our constituents in this regards on strategies to effect this and ensure that we assist in improving activities of companies that appear to be on the bottom list, by this way, we will be making our market a liquid and an attractive market.”

He said that plans were also in place to improve capitalisation on the Exchange, adding that if this was done, it would help in diversifying the listing base.

“We plan to encourage the listing of new issues especially from companies in the Telecommunications and oil and gas industries,” he added.

 

Source: Punch