The Nigerian Exchange Group (NGX Exchange) has placed Resort Savings and Loans (Mortgage firm), Union Homes, and Aso Savings & Loans on restructuring status.
This was disclosed by the Exchange in its X-Compliance Report, released last Friday and seen by Nairametrics.
Why they were asked to restructure
The Exchange approved their restructuring after it suspended trading in the shares of the three companies for failing to file their financials with the bourse between 2017 and 2020.
The companies were suspended pursuant to the provisions of Rule 3.1, Rules for Filing of Accounts and Treatment of Default Filing, Rulebook of The Exchange (Issuers’ Rules).
The Rule provides, “If an Issuer fails to file the relevant accounts by the expiration of the Cure Period, The Exchange will send to the Issuer a “Second Filing Deficiency Notification” within two (2) business days after the end of the Cure Period; suspend trading in the Issuer’s securities; and notify the Securities and Exchange Commission (SEC) and the Market within twenty- four (24) hours of the suspension.”
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What it means for the trio
The restructuring status means that the companies need to boost their liquidity after failing to file their financial reports with the Exchange. For instance, Union Homes Savings & Loans, and Aso Savings & Loans have not sent their 2014 – 2019 audited results to the exchange for obvious reasons.
Findings by Nairametrics have revealed that the companies are currently going through hard times related to financial misappropriation.
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Resort Savings and Loans
A few years back, the Chairman of Resort Savings and Loans, Senator Sunday Fajinmi, had reportedly invited the Economic and Financial Crimes Commission (EFCC) to investigate the former management of the firm over allegations of fraud.
Also, some depositors of the company alleged that the new management, which promised to refund their deposits within two months after take-over, had abandoned them, adding that the new management equally lacked good corporate governance.
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Aso Savings & Loans
Nairametrics found that the results of the company used to be frequently posted until 2012. Between 2013 and 2016, the financials are missing even on the site of the firm. In 2016 and 2017, Aso Savings posted a summary of its first-quarter interim statements.
It managed to grow its PBT from a loss of N12.4 million as at March 2016 to a profit before tax of N10.4 million by end of March 2017, as well as witness the increase of the bank’s total liabilities from N73.3 billion to N76.6 billion within the same period.
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Union Homes
Like Aso Savings, Union Homes has not been consistent in posting its results. The last time its investors and stakeholders heard from the bank was in 2015 when it posted its Q3 2015 unaudited account. It posted a loss after tax of N67 million, lower than the N1.3 billion declared in 2014. The bank’s total liabilities also stood at N36.2 billion.
What you should know
In December 2020, Nairametrics reported that Camey & Rock Business Consulting executed a share purchase agreement with Resort Savings and Loans Plc, worth N4.3 billion.
This is according to a notification sent by the latter to the Nigerian Stock Exchange market yesterday and seen by Nairametrics.
The cash involved in the deal is scheduled to be injected in tranches. Also, activities related to the transactions are still ongoing.
In order to resolve some administrative and basic regulatory issues, Camey & Rock called for an extension from CBN to enable it conclude the recapitalization exercise of the bank outside the deadline of 31 December, 2020 to 30 June, 2021.
Nice write-up
Good Article