AUTHORITIES at the Nigerian Exchange (NGX) Limited have lifted the suspension on trading in the shares of African Alliance Insurance Plc and Royal Exchange Plc after the two firms complied with the corporate governance rules by submitting their financial statements.
African Alliance Insurance and Royal Exchange with two other companies were suspended last July 2, for failing to submit their audited financial statements for the 2020 business year as well as the first quarter of 2021.
In a circular, NGX Regulation (NGXReg), the regulatory arm for the NGX Group, stated that the two insurance companies have filed their audited financial statements for the year ended December 31, 2020 and unaudited financial statements for the quarter ended March 31, this year.
Rule 3.3 of the Default Filing Rules of the NGX stipulates that “the suspension of trading in the issuer’s securities shall be lifted upon submission of the relevant accounts provided the Exchange is satisfied that the accounts comply with all applicable rules of the Exchange”. The lifting of suspension took effect on October 4, 2021.
Post-listing rules at the NGX require quoted companies to submit their audited earnings reports, not later than 90 calendar days after the expiration of the period.
The rules also require quoted companies to submit interim report not later than 30 calendar days after the end of the relevant period.
Not less than 85 per cent of quoted companies, including African Alliance Insurance and Royal Exchange, use the 12-month Gregorian calendar year as their business year. The business year thus terminates on December 31. While March 31 is usually the deadline for submission of yearly report for companies with Gregorian calendar business year, the deadline for the quarterly report is a month after the quarter.
Suspension and compulsory delisting from the market are the highest levels of sanctions for failure to adhere to extant listing and corporate governance rules. The NGX also tags and applies fines on companies that fail to meet earnings reports’ deadline. Companies may pay fines that range from N100, 000 to more than N100 million as penalties for delay in the submission of their corporate earnings reports. Companies that also delayed their financial statements and accounts face threats of suspension and delisting in addition to the monetary fines.
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