Investors Decry High Charges, Fines Paid by Listed Companies

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Goddy Egene

Investors in the Nigerian bourse have decried the high charges and fines by regulatory agencies, saying they are not only affecting returns on investments but are also discouraging companies from listing their shares on the Nigerian Stock Exchange(NSE).

There have been efforts by capital market regulators to woo more companies to list their shares in the market, a move that is expected to make investors have access to many investment opportunities and deepen the market.

Besides, it is expected that when more companies enlist, the federal government will earn more revenue in form of tax. But instead of companies to list and enjoy the benefits, most of them stay away from the market. There are over 1,000 registered public companies but the firms listed on the Nigerian Stock Exchange (NSE) are less than 300.

However, investors who spoke to THISDAY on Monday said that the high charges and fines by regulators are discouraging companies from accessing the capital market, thereby making the efforts to encourage more listings to yield little result.

For instance, Mr. Oderinde Taiwo of Proactive Shareholders Association of Nigeria said the fines are becoming counter-productive and make some companies to delist as an option.
“In fact, the way regulators are charging fees and imposing fines on companies, is becoming a big risk to our investments in the market. Many companies are delisting because of this development,” Taiwo said.

Speaking in the same vein, Mr. Moses Igbrude of Independent Shareholders Association of Nigeria (ISAN), said rather than creating an enabling environment for more companies to thrive and list on the NSE, government agencies are stunting the growth of companies through their various fines and charges.

“To me it sounds ironic that while government is making efforts to ensure that more companies access the capital market, its agencies saddled with the regulation of financial sector, for instance, are playing discouraging roles. Instead of using moral suasion in dealing with valuation of any some of the rules, these regulators use punitive measures and various fines. This is not only eating into our investments but is also making some companies to have a second thought whether to remain listed or go private,” Igbrude said.

Last week, Mr. Boniface Okezie of Progressive Shareholders Association of Nigeria, berated the high charges paid by Med-View Airline Plc to the Federal Airports Authority of Nigeria, Nigerian Civil Aviation Authority (NCAA) Nigerian Airspace Management Authority (NAMA) in 2016 financial year.
The airline paid charges of N3.717 billion to the three government’s agencies, showing a jump of 119 per cent compared with N1.690 billion paid in the 2015.

According to Okezie, “This is highly discouraging. I want to tell the regulatory agencies that they are not helping the airlines. This trend is worrisome because as investor, you will not want to and invest in an environment where you pay exorbitant charges.”
Shareholders had, in the past condemned the Central Bank of Nigeria (CBN), Securities and Exchange Commission and NSE for imposing fines of banks and other companies that violate regulations, saying such fines should be reduced.