NGX Suspends Trading in Shares of Ardova, Presco, Royal Exchange, Others

The Nigerian Exchange (NGX) temporarily stopped trading on seven businesses for refusing to abide by to best corporate governance practices, which require them to present audited results within a certain time frame.

The companies that were suspended are Ardova Plc, Presco, C and I Leasing, Royal Exchange, International Energy Insurance, Pharma Deko, and Afromedia.

The full suspension indicates that there will be no transactions on the firms' shares, including share price movement and trade on their shares.

According to an NGX circular, the firms were suspended after failing to submit their audited results and accounts for the fiscal year ending December 31, 2022.

The suspended businesses, according to the Exchange, failed to comply with guidelines requiring timely filing of results.

Current stock exchange standards require listed businesses to submit their full-year audited results and account no later than 90 days following the end of the fiscal year. However, the deadline for submitting the 2022 results was March 30, 2023.

THE STATEMENT 

• “Trading License Holders and the investing public are hereby notified that under Rule 3.1, Rules for Filing of Accounts and Treatment of Default Filing, (Default Filing Rules), which provides that: “If an Issuer fails to file the relevant accounts by the expiration of the Cure Period, The Exchange will: a) Send to the Issuer a “Second Filing Deficiency Notification” within two (2) business days after the end of the Cure Period; b) Suspend trading in the Issuer’s securities; and c) Notify the Securities and Exchange Commission (SEC) and the Market within twenty- four (24) hours of the suspension”, 

• “Trading in the shares of the seven (7) companies has been suspended from the facilities of Nigerian Exchange Limited (NGX) effective today, Tuesday, 11 July 2023 having failed to file their Audited Financial Statements for the year ended 31 December 2022. 

• “By the Default Filing Rules set forth above, 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 Limited (NGX RegCo) is satisfied that the accounts comply with all applicable rules of NGX”.

The listed firms are expected to report their unaudited quarterly results within 30 days of the end of the quarter.

The guidelines, however, enable NGX to consider a broad extension of the deadline in the event of a general difficulty preventing compliance or a specific exemption for a firm based on a displayed barrier.

Suspension is the second most severe sentence available under the penalty scheme for noncompliance. If a firm continually fails to meet the deadline after a specific grace time and processes, the NGX may decide for compulsory delisting or outright removal from the market.