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Section 60(1) of the Investment and Securities Act, 2007 requires that “a public company whose securities are required to be registered under the Act shall file with the Commission on a periodic or annual basis its audited financial statements and such other returns as may be prescribed by the Commission from time to time”.
Section 65(1) prescribes that a public company who contravenes the provision of S.60 is liable to “a penalty of not less than N1, 000,000 and a further penalty of N25, 000 per day for the period the violation continues”.
In 2011, 2012 and 2013 public companies were communicated their respective penalty balance (for late and none submission of returns) outstanding in the record of the Commission. and were further encouraged to pay.
In order to encourage companies to pay these penalties outstanding, the Board of the Commission at its 74th meeting held on Thursday 5th December 2013 considered and ratified its approval given at the 72nd Board meeting for waiver of penalty due from listed companies. It was approved that the waiver should be executed thus: “That the companies be granted a 40% waiver.
Thereafter, any company that pays the outstanding penalty within 3 months should receive an additional 20% waiver, making it a total of 60% waiver.
Subsequent to the waiver granted by the Board of the Commission, the Nigeria Employers Consultative Association (NECA) requested to meet with the Commission to discuss issues relating to penalty.
On Monday 31st March 2014, a delegation from NECA headed by the Director General, Mr. Segun Oshogbo met with the Commission. The meeting which was chaired by the then Executive Commissioner (now Director General of the Commission) resolved that NECA’s request would be considered and that the waiver consideration of 100% waiver for penalty accrued up to 2010 and a further 40% on penalty owed from 2011 to 2013 would be proposed to the Board.
The Board at its 76th meeting held on Wednesday 9th July 2014 considered the request for waiver of penalty in line with NECA’s recommendation and approved the following:
A 100% waiver of all penalties imposed on public companies from 2008 to 2010.
40% waiver on total penalties imposed 2011 to 2013.
In line with the approval, status of penalties for all public companies was communicated in writing.
Furthermore, the Commission in 2014 created an electronic platform for the submission of all returns by public companies. The purpose is to reduce the burden and delay companies experience in submitting the regulatory returns. Public companies were also communicated of this initiative of the Commission.
An evaluation of the application of sanctions shows that public companies have become aware of their responsibilities. While the Commission only recorded about 35% level of compliance with its Rules and Regulation as at 2011, over 80% compliance has been achieved as at the end of June 2016. As a result there is a downward slope in penalty charged year on year (YoY), which indicate a higher compliance level.
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