Shareholders have advised the Securities and Exchange Commission (SEC), the Nigerian Exchange Regulation Limited (NGX REGCO), and other regulators in the financial sector to strengthen their disclosure requirements for quoted companies.
The shareholders said this following recent revelation by the Central Bank of Nigeria (CBN) that First Bank Nigeria Limited, which is a subsidiary of FBN Holdings Plc, had been enjoying forbearance since 2016. And this forbearance was not disclosed in the audited financial statements submitted to the NGX REGCO.
The National Coordinator, Pragmatic Shareholders Association of Nigeria (PSAN), Mrs. Bisi Bakare, said it was shocking to know that FBN Holdings, which is one of the leading firms listed on the stock exchange, had been submitting its annual reports without disclosing the forbearance it had been enjoying from CBN.
“It is even more worrisome that the regulators could not discover this. I think the regulatory authorities in question should take this matter up with the bank why that forbearance was not disclosed in its financial reports.
“The past board members under the former chairman must all be queried on why such disclosure was not made because this action is against the disclosure rules of the exchange and others. If action is taken on the matter, it will also go a long way to serve as a deterrent to others. It will bring sanity and respect for our market within and outside the country as the matter has become a global issue,” Bakare said.
According to her, the regulators must strengthen their disclosure rules, noting that “more investments can only come into our capital market space if our regulators are putting responsible check and balance in their statutory duties on listed entities. There should not be room for sacred cows.”
The PSAN boss recommended that the external auditors should be seriously penalised for failing to make the full disclosure in their key audit matters.
Also speaking, the National Coordinator, Independent Shareholders Association of Nigeria (ISAN), Anthony Omojola, said it had been said in the past that some institutions, especially banks, were favoured.
“Some carry on with impunity without being challenged why some paid dearly for minor and issues requiring corrections. The matters of the defunct Intercontinental Bank and Oceanic Bank cannot be forgotten easily. Whichever way we look at it, it is the minority shareholders and the economy that suffers for it.
“The truth is that First Bank Nigeria is not the only skeleton bank being supported by CBN, it is the attitude of the super investors that reveal this situation. I will be surprised if the SEC and NSE are not aware of the situation.
How did they handle their N2 billion bond issues some years ago? How did they handle Bernard Longe, former MD of the bank, court judgment? I think there was a good understanding between them until the stubbornness let out the cat,” he said.
Omojola, however, called for caution, saying that further negative acts could affect the institutions greatly to the detriment of our fragile economy.