…As NSE fines African Alliance N46.1m for late account submission***
Three shareholders’ groups have call for the immediate sack of the Minister of Finance, Mrs. Kemi Adeosun, for her unwholesome interference on the affairs of the Securities and Exchange Commission (SEC).
They described the minister’s decision to reassigns portfolios in SEC as “unnecessarily meddling” with the functions of the commission, which has caused severe damage to the capital market.
Specifically, the National President of Trusted Shareholders Association of Nigeria (TSAN), Alhaji Mukhtar Ismail Mukhtar; the National Coordinator, Proactive Shareholders Association (PROSAN), Taiwo Oderinde; and the Coordinator, Oando Shareholders Solidarity Group (OSSG), in a joint statement on Sunday, said Adeosun has inevitably caused untold harm both to the independence of SEC and the nation’s capital market in her desperate attempt to shield Oando from probe.
The statement reads: “We wish to bring the attention of His Excellency President Muhammadu Buhari, Vice President Yemi Osinbajo and all Nigerians to the unwholesome, unpatriotic and strange actions of the Minister of Finance, Mrs. Kemi Adeosun with regards to the probe of Oando Plc.”
Speaking on behalf of the groups, Oderinde said: “You may recall that since early last year, Oando has been enmeshed in series of crises bordering on abuse of corporate governance and alleged gross financial mismanagement.
“The internal auditors of Oando Plc, Messrs Ernst & Young, in the company’s financial report last year expressed doubts over its ability to continue as a going concern because its liabilities exceeded its assets.
“As concerned shareholders, we sent petitions to the Securities and Exchange Commission (SEC) and to the House of Representatives Committee on Capital Market.
“The committee mandated SEC to investigate these allegations, culminating in the setting up of a committee by SEC to carry out a preliminary investigation of the company’s affairs.
“SEC’s preliminarily investigation, as disclosed by the commission in a letter dated October 17, 2017 signed by its Head of Legal unit, Braimoh Anastasia, unearthed several malpractices in the company.
These include insider trading, decoration of dividends from unrealised profits, release of false financial statements to the public and the disposal of assets without the knowledge of the regulatory body in contravention of the Investment and Securities Act (ISA) 2007, among several other infractions.
“These weighty findings compelled the suspension of Oando shares on the floor of the Nigerian Stock Exchange and the Johannesburg Stock Exchangeto pave way for a more thorough investigation.”
In the meantime, the Nigerian Stock Exchange (NSE) has imposed a fine of N46. 1 million on African Alliance Plc for breaking its rule on account submission.
According to NSE X-Compliance Report, released on April 12, 2018, the fine is for late submission of its 2015 and 2016 audited accounts.
The fine and management expenses have, however, affected the reserves of the company as it recorded N1.49 billion management expenses and negative reserves amounting to -N21.05 billion during the period under review.
With the negative reserves, the company may not be able to meet most of its responsibilities, especially prompt claims payment.
According to the NSE, the company filed its audited and interim financial statements after the regulatory due date, stating that it applied sanctions in accordance with the rules for filing of accounts and treatment of default filing under the Rulebook of The Exchange.
In addition, the NSE described the company as a delinquent filer of audited accounts as it fell short of the minimum listing standards in terms of timely disclosure of its audited annual financial performance and has Missed Regulatory Fillings (MRF) or Awaiting Regulatory Approval (AWR) of their primary regulators, which is the National Insurance Commission (NAICOM).
The shareholders of the company have expressed their displeasure at the way the company is being run, stating that instead of rewarding the shareholders, who have stood by the company during trying times, the firm is busy paying millions in fines to regulatory bodies.
Speaking on behalf of shareholders in the insurance industry, the President, Progressive Shareholders Association of Nigeria (PSAN), Mr. Boniface Okezie, said: “Some insurance companies have corporate governance issues. We commend NAICOM because it will not approve any account unless it is thorough. We give kudos to the Commission for safeguarding the interest of the investors as well as customers.”
Insurance stocks, he said, have been unprofitable for shareholders for some years now as managment has not been able to give good returns on investment. He noted that this was the reason why share prices have remained at par value.
He said shareholders react to the results a company releases, its dividend payout, its future prospect, adding that insurance companies have failed in all these.
“So, where do you expect the price to go? The price would remain as it is. It is the dividend payout that throws up the prices, and so long as you don’t pay a commensurate dividend to the shareholders, that is what you get,” he said.
Meanwhile, NAICOM has frowned at the attitude of some insurance operators for failing to file annual reports.
A top NAICOM official said some companies, especially those quoted on the floor of the NSE file their reports as late as March 29 when indeed, the deadline for submission is March 30.
He stressed that this is despite the Commission’s decision to fast-track approval for all quoted companies.
He noted that the financial year end for insurance companies, as it is for other financial sectors, is December.
He said the Commission is saddened that some operators still struggle to meet up with the deadlines.
Guardian NG with additional report from Nation