The Nigerian Stock Exchange (NSE) on Friday placed the shares of eight quoted companies on suspension for various market infractions.
This means that trading on the shares of cannot be conducted until the Exchange lifted the suspension.
The names of the companies suspended are African Alliance Insurance Plc, Cornerstone Insurance Plc, R. T. Briscoe Plc and Royal Exchange Plc. Others are STACO Insurance Plc, Standard Alliance Insurance Plc, Universal Insurance Company Plc and Veritas Kapital Assurance Plc.
The NSE in a statement said the suspension of the above listed companies will only be lifted upon the submission of the relevant accounts and provided The Exchange is satisfied that the accounts comply with all applicable rules of The Exchange.
Findings revealed that majority of the suspended firms, which are from the Insurance subsector, are perennial offenders. For instance, African Alliance Insurance has been suspended several times in the last few years.
An X compliance report released in April this year showed that the company was fined N46.1 million in 2017. And in July 2013, it was among several firms fined by the NSE for late submission of their audited results.
Again in July 2017, the company once more fell under the NSE hammer as it was suspended for non-submission of its audited results.
However, it blamed the delay in the submission of results on a delay by a foreign subsidiary, which was yet to release its results.
The non-release of their results is a sign that some of the companies are struggling about its assets, operations, or other financial information.
For example, most recent results by R.T Briscoe for the 9 months ended September 2017 showed that the firm made a loss after tax of N1.7 billion.
It also has negative retained earnings of N8.5 billion and negative cash flow. In essence, it is surviving on bank loans.
Also, the recent results of African Alliance Plc for the 9 months ended September 2017 revealed that it made a loss after tax of N2.1 billion and negative retained earnings of N24.8 billion.
Universal Insurance, a sister company to African Alliance has also performed poorly. The company made a loss after tax of N237 million for the half-year ended June 2017. Universal also has negative retained earnings of N2.9 billion as at June 2017.
Meanwhile, investors are perhaps better off, avoiding these companies pending when their suspension is lifted and they publish their most recent results. Being suspended also means you cannot purchase their stock and can’t sell either.