Sec decries non-rendering of returns by companies

Written by Duncan Monday, 10 May 2010

The Securities and Exchange Commission (SEC) has decried the low response of publicly quoted companies to render returns as stipulated by the law.

SEC Director General, Ms Arunma Oteh, speaking at a meeting with the financial controllers and Company Secretaries recently in Abuja, disclosed that  more than 50 per cent of quoted companies in Nigeria have not been complying with section 60 of the Investments and Securities Act (ISA) 2007 in terms of rendering of quarterly and half yearly returns which has attracted sanctions.

The Director-General said the commission organised the meeting with them to address the lingering issue of non-rendition, and late rendition of quarterly and half yearly returns of publicly quoted companies.

On the need for timely and adequate rendition of returns, the Director-General disclosed that such rendition would afford investors the opportunity to make rational investment decisions and enable the commission to ascertain the financial health of publicly quoted companies, ensure compliance with good corporate governance and adherence to other regulatory requirements.

In addition, she explained that the rendition of timely, accurate and reliable information to investors will assist in rebuilding the confidence in the market.

She opined that it was largely non compliance with governance issues that led to the collapse of big corporations such as Enron and Worldcom.

“Back home, that recent crisis in the financial market could also be partly attributed to non-compliance with corporate governance,” she said.

Corporate governance, according to her, is considered an important issue in the corporate and business World. “It impacts on corporate performance, shareholders value, public perception, ability to attract the best, employee morale, capital markets and indeed the economy”

She, however, acknowledged that the commission had, in recent times, noted some improvement in the quality of the returns rendered by some public companies, but that the number of companies that have been rendering their returns is still below expectations.

Corroborating the Director-General of SEC, the commission’s Director of Financial Standard and Corporate Governance (FS&CG), Mrs. Obhielo Abigail, said section 60 of the ISA requires all public companies to file with the commission on annual and periodic basis, its audited financial statements and such other returns as may be prescribed by the commission from time to time.

She stated that pursuant to the requirement of the Act, the commission on March 10, 2009 issued a circular to all publicly quoted companies, on the modalities for filling the audited annual reports and account, half yearly returns on corporate governance and unclaimed dividends and quarterly financial reports.

She reiterated the information need of various stakeholders ranging from being able to assess the financial health of the public quoted companies by the regulator for effective allocation of resources by companies.

She added that efforts are on by the commission to ensure that the key drivers of the capital market, which are adequate, reliable and timely information are achieved.