Stakeholders in the financial market have expressed dismay over the rate at which public companies violate extant rules of their respective regulators, thereby attracting heavy fines. According to a cross-section of key shareholders that spoke with Financial Vanguard, recklessness and carelessness on the part of companies’ chief executives that give rise to such penalties should be curtailed, or the board and management of such companies should either be sacked or be made to pay the fines instead of using shareholders’fund.
Also, this year, the Nigerian Stock Exchange (NSE) fined 33 quoted companies N63.8 million. Their offence was reneging on their post-listing rules requirement in relation to timely submission of yearly and quarterly financial statements.They said that shareholders bear the brunt of their carelessness as the company’s profit is reduced as a result and in effect lowers the dividends accruing to members of the company. Financial Vanguard investigation showed that, a total of N241.529 million was paid as fines by four banks — FCMB Group Plc, Sterling Bank Plc, Access Bank Plc and United Bank for Africa (UBA) for flouting the Central Bank of Nigeria (CBN) directives in 2014 financial year alone.
Financial Vanguard findings showed that Access Bank suffered the most penalties among all the listed entities surveyed and was made to pay N184 million in fines for contravening various sections of Bank and Other Financial Institutions Act (BOFIA) and CBN’s circulars.
The bank was fined N174 million for a contravention on the reporting of public sector deposits in line with the CBN guidelines. It was also fined N2 million by the CBN for weaknesses observed in its internal process and KYC procedures, including other offences. The sum of N51.5 million fine was imposed on Sterling Bank Plc by the CBN and the Nigerian Stock Exchange (NSE) for violating their various regulations, as fines.
Specifically, the CBN fined the bank N50 million for under-reporting its public sector deposits as at August 29, 2014, while the NSE slammed N1.5 million fines on the bank for publication of newly appointed Board members without prior notification and approval from the Exchange. Similarly, FCMB Group Plc paid cash penalty amounting to N6 million for contravening some sections of the provisions of the BOFIA and relevant CBN circulars.
A subsidiary of the bank – FCMB Limited, according to Financial Vanguard findings, failed to satisfactorily implement prior-year external auditors’ recommendations and was fined N2 million; it also rendered incorrect returns to CBN on its MTR 202 and also failed to comply with ATM operation standard at ATM located at Lekki, Lagos, and was fined N2 million each for both of the offences. During the 2014 financial year, the United Bank for Africa paid a penalty of N0.29 million for ‘delay in remitting unapplied funds to beneficiaries’.
Already, this year (2015), the CBN has imposed combined fine of N4.8 billion on UBA Plc and First Bank of Nigeria for Treasury Single Account (TSA) breach. In the same vein, Skye Bank Plc was fined N4 billion for the same offence. The companies involved in the NSE sanctions include: Aso Savings and Loans Plc (N3.7m); Mutual Benefit Assurance Plc (N3.8m); African Alliance Insurance Plc (N4.2m); Resort Savings and Loans Plc (N4.3m); Nigeria Enamelware Co. Plc (N1.6m); eTransact Int’l Plc (N2.7m);
Universal Insurance Plc (N5.3m); Great Nigeria Insurance Plc (N5.6m); C & I Leasing Plc (N1.3m); Nigerian Ropes (N100,000.00); N.E.M insurance (N300,000.00); Fortis Microfinance Bank (N600,000.00); LASACO Assurance (N400,000.00); Equity Assurance Plc (N500,000.00); Japaul Oil and Maritime Plc (N400,000.00); Regency Assurance Plc (N700,000.00); Staco Assurance Plc (N700,000.00); Niger Insurance Plc (N700,000.00); Daar Communications Plc (N6m); Linkage Assurance Plc (N900,000.00); Studio Press Plc (N900,000.00); and R.T Briscoe, which was fined N1.5 million for late submission of its 2014 full year result.
Others are; NASCON Allied and Industries Plc (N100,000.00); Vitafoam Nig. Plc (N1.4m); Union Diagnostic and Clinical Services (N100,000.00); Law Union & Rock Insurance Plc (N100,000.00); Multiverse Plc (N1.8m); Flour Mills of Nigeria Plc (N300,000.00); Standard Alliance Insurance Plc (N2.4m); Arbico Plc (N1.8m); Conoil Plc (N1.8m); Omoluabi Savings and Loans Plc (N1.6m) and Oando Plc (N6.2 million).