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WHY WE DIDN'T SUBMIT 2011 ANNUAL REPORTS, BY QUOTED COMPANIES

By NBF News
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LAGOS - Some quoted companies on the Nigerian Stock Exchange, NSE, yesterday, attributed the delay in submitting their 2011 annual accounts to a court judgment voiding financial statements signed by auditing firms. Sources close to the affected companies said they were re-working their financials to meet the current requirements.

According to the company secretaries of two petroleum marketing companies and one insurance firm, the judgment that recognised only named auditors or accountants as approved signatories in financial statements imposed additional cost on them. Available records at the NSE showed that only 10 of the 119 listed companies have so far submitted their 2011 annual reports.

The companies which NSE could not confirm if their signing-off status conformed with the judgment are Nigerian Breweries, GlaxoSmithKline Nigeria, Courteville Business Solution, Okomu Oil and Nestle Nigeria. Others are First City Monument Bank, Access Bank, GTBank and Universal Insurance Company.

Justice O. E. Abang of the Federal High Court, Lagos, had earlier in a case brought by an accountant, Mr Okechukwu Unegbu, restrained KPMG Professional Services from signing auditor's report of Guinness Nigeria and any other financial document.

The judge, in his 10-point judgment on November 15, 2010, also restrained Guinness from accepting from KPMG and distributing to shareholders, regulatory authorities any auditor's report or financial statement signed by KPMG.

Abang also declared, among other things, that KPMG or any other accounting firm was not a person enrolled as accountant or auditor cited in Section 8 of ICAN Act.

In declaring the 2009 Guinness annual report and financial statement signed KPMG as null and void, the court also declared that Guinness did not have a valid financial statement for 2009. The court declared that the purported Guinness Annual General Meeting of November 3, 2009 was incompetent, null and void based on Sections 213 and 214 of CAMA.

=Abang also stopped Corporate Affairs Commission, the Securities and Exchange Commission and the Nigerian Stock Exchange from accepting auditor's report or financial statement not signed by a named person.

Unegbu had earlier in his suit against KPMG and Guinness Nigeria Plc urged the court to determine whether a firm of accountants could sign a document in the firm's name where the law provided that such a document must be signed by an auditor or accountant.

Unegbu, the former President of the Chartered Institute of Bankers of Nigeria, in the suit  had argued that the signature of KPMG in Guinness 2009 Annual Report was not the signature of an auditor or an accountant provided in ICAN, CAMA and ISA Acts.

The nation's four biggest auditing firms and the Institute of Chartered Accountants of Nigeria (ICAN), had in March 10, lost their bids to continue signing the annual reports of companies operating in the country.

The four auditing firms are Pricewaterhouse Coopers Nigeria, Ernst and Young, Akintola Williams Deloitte and KPMG Professional Services.

The Federal High Court, Lagos, had on May 10, 2010, granted a stay of execution of an earlier judgment which declared companies account signed by the auditing firms null and void. Justice Okechukwu Okeke of the Federal High Court, Lagos on March 21, 2012 discharged the ex-parte order granted in favour of the firms and ICAN.

He said the order had lapsed based on Order 26, Rule 12 of the Civil Procedure Rules, 2009. Okeke also disqualified himself from further hearing of the suits based on what he termed 'public confidence' and ordered the return of the case file to the chief judge for reassignment.