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The shares of nine companies are currently still suspended from trading by the Johannesburg Stock Exchange (JSE) for not publishing their financial results on time.
The exchange lifted the suspension of another four companies after they published their results. JSE regulations require that a listed company publish its interim and annual results within three months after the end of the reporting period.
The annual results should be either reviewed condensed results or audited financial statements.
The company is then obliged to publish its comprehensive annual report, containing audited annual financial statements, within four months after the financial year-end.
The main difference between the initial publication of annual results and an annual report is that the latter contains additional prescriptive information, such as the notice of the annual general meeting, corporate governance disclosures and other information required by the Companies Act and the JSE’s listing requirements.
Most companies issue their full annual reports within the three-month deadline for the publication of their annual results, removing the need to adhere to two different time frames.
Andre Visser, director of issuer regulation at the JSE, says these time frames align with international practice and reflect “the importance of financial information for investors”.
“If an issuer fails to comply with the deadline referred to for annual and interim results within 14 days, then the JSE will annotate the issuer’s listing on the trading system indicating to the market that the issuer has failed to comply with the requirements,” he says.
“At the same time, the JSE will release a Sens announcement advising the market that the issuer did not submit their annual or interim results and cautioning that the issuer’s listing may be suspended if the issuer fails to comply by the end of the fourth month.”
The same process applies to the annual report, except that the timelines are slightly different.
Trade in a company’s share will only face suspension five months after year-end. Most listed companies publish their results within the prescribed time frames.
“The timeous publication of financial information is critical for investors to make informed investment decisions and it is for this reason that the JSE has a robust regulatory framework for this to ensure a fair and efficient market,” says Visser.
The JSE says it is important to note that the decision to suspend the trade in a company’s shares must follow the process prescribed by the Listings Requirements and the Financial Markets Act.
These include affording the issuer of the listed instruments an opportunity to make written representations as to why the suspension should not be effected. However, a company must continue to comply with the listing requirements and relevant regulations even if its shares and other instruments are suspended.
A company must also give regular progress reports to the JSE and shareholders on the current state of affairs and any actions taken to have the listing reinstated.
The suspensions of trading in the shares of Acsion, Sable Exploration and Mining, Visual International and Vunani were lifted when these companies issued their results.
Many of the companies that remain under suspension have been suspended for a long time, with some in business rescue or in the process of being liquidated.
Tongaat Hulett’s listing was suspended in June 2019 at the request of the board of directors when it notified shareholders that financial statements for the year to March 2019 would not be ready on time and due to the continuing review of past financial practices.
While these results were published, as well as those for subsequent years, the shares remained suspended because the company entered business rescue.
The latest official update from the company states that the business rescue practitioners still believe that Tongaat can be saved.Tongaat Hulett shares were suspended from trading on the JSE on 20 July 2022, pending the release of the audited annual financial statements for the 2022 financial year.
The company opted for business rescue a few months later, and has still not published audited results. Chris Logan, founder and CIO of Opportune Investments, says Tongaat still needs to comply with the Companies Act and must publish its annual results.
“We are talking about the second biggest fraud on the JSE.”
Not reporting any results for three years creates space for misdirection.— Moneyweb.
Online Reporter