Many companies have ignored disclosure and securities filing requirements in the past.
In line with new regulations, Ukrainian companies have started posting their quarterly financial reports on a publicly available government corporate disclosure website.
April 25 was the last day that some 2,000 companies were required to post their first quarter 2007 reports on the stockmarket.gov.ua website run by the Agency on Equity Market Infrastructure Development.
The companies required to do so include those enterprises in which the government owns at least 25 percent and those that have issued bonds.
“This is great news, and one more step toward openness,” said Nick Piazza, an analyst with Concorde Capital, a leading Ukrainian investment bank.
“Before we had to beg to get this kind of information. The hope is that, eventually, all Ukrainian companies will post quarterlies.”
Ivan Kharchuk, an analyst with Dragon Capital, another leading Ukrainian investment bank, said the launch of the new site is an overall positive development, but drawbacks do exist.
“Firstly, it is unlikely that all companies will file their reports,” Kharchuk said.
“Secondly, Ukrainian financial reporting standards are low in quality, unconsolidated and often do not provide the full picture of a company. It’s a wait-and-see situation,” Kharchuk added.
Many companies have ignored disclosure and securities filing requirements in the past. There have been complaints about a related filings website operated by the government, smida.gov.ua, for containing incomplete information. Fines for failure to comply have been relatively small. Larger enterprises may choose to ignore the regulation and simply not file, opting to pay the relatively small fines rather than revealing sensitive corporate information.
Olena Tabala, director of the Department for Monitoring and Strategic Development of the Stock Market, said that companies had until midnight April 25 to disclose their quarterly financials. Those that failed to do so will be subject to administrative measures, including fines.
Fines can be as high as 1,000 untaxed minimum incomes – the equivalent of some Hr 17,000, or $3,400. Although the regulation is mandatory, the public filing service is free.
The new regulation for filing quarterly reports imposed by the State Securities and Stock Commission came into force in March. It was based on recommendations of regulators and analysis of practices in Europe, the US, Kazakhstan and Russia, Tabala explained.
Generally speaking, most companies abide by the regulations, she said, adding that it is too early to estimate how many companies will or will notcomply with the new quarterly reporting requirement.
As the post went to press late on April 25, the stockmarket.gov.ua website contained quarterly reports for more than 500 companies.
