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NSE, regulator warn bond issuers against late release of results

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Capital Markets Authority CEO Paul Muthaura (left) with his NSE counterpart Geoffrey Odundo at a recent event in Nairobi. PHOTO | SALATON NJAU

The Capital Markets Authority (CMA) and the Nairobi Securities Exchange (NSE) have issued a joint circular cautioning issuers of public securities against sub-standard and late financial reporting.

The circular by CMA and NSE comes against the background of delayed financial results by a number of listed firms such as TransCentury #ticker:TCL, Crown Paints #ticker:BERG and Uchumi #ticker:UCHM.

There have also been queries over the quality of books of a number of firms which have run into financial headwinds even though their books indicate a clean bill of health.

“It has been observed that although most of the issuers comply with the requirement to prepare and publish financial statements within the stipulated timelines, the information published does not meet the minimum required level of disclosure envisaged by the regulation,” reads the circular dated April 26.

“In this regard, kindly note that all issuers of securities to the public, whether listed or not, are required to prepare and publish their annual and interim financial statements in at least two newspapers of national circulation within four and two months of the close of the financial year respectively.”

In addition to complete balance sheet, cash flow, income and change-in-equity statements, firms are required to publish notes showing the audit opinion and a summary of key audit matters raised by their auditors.

Failure to observe prudential guidelines often leads to investors putting money in dead counters.