Nearly three months following iCreate Limited’s second suspension, the Jamaica Stock Exchange’s (JSE) Regulatory Market & Oversight Division (RMOD) has specifically detailed the latest breaches committed by the Junior Market company.

The JSE suspended trading in iCreate’s shares on January 18 due to it not complying with the requirements of JSE Junior Market Rule Appendix 4 – Admission Agreement, Paragraphs 2 and 4. Those paragraphs spoke to complying with Rule 505, ongoing requirements and any other requirements imposed by the JSE at all times and responding promptly to any enquiries that the JSE may have to verify compliance and to always deal with the JSE in an open and co-operative manner.

However, the absence of specifics about the breaches left iCreate’s numerous shareholders unable to ascertain what the company needed to remedy for trading to resume again.

The RMOD’s January 2024 regulatory report which was published on Monday had three breaches listed specifically for iCreate out of the 14 items across the market during the month. The first breach noted that when iCreate submitted its 2022 audited financials, it did not include the shareholdings of directors, senior managers, and connected persons. The second breach was related to the absence of any top 10 shareholder and other shareholding disclosures in iCreate’s 2022 annual report while the third breach was the absence of shareholding information in its second quarter report.

The ongoing requirements for financial reporting calls for a company to submit the relevant shareholder disclosures in its quarterly and audited financial statements. Thus, while iCreate would have had this shareholder information, provided by the Jamaica Central Securities Depository (JCSD), included in its unaudited fourth quarter report which was published in February 2023, the absence of it in subsequent publications was used as the justification to suspend iCreate again.

iCreate Chairman, President and CEO Tyrone Wilson mentioned at a February 2 press briefing that the company had submitted all outstanding documents to the JSE and expected to receive a response on when the stock would trade again. There have been no additional announcements from iCreate or Wilson on the continued suspension.

iCreate was the second worst performing stock on the Junior Market in the first quarter as it declined 21 per cent to $0.41 before its suspension. The company provided an updated trading notice on March 28 and expects to submit its audited financials by April 30. It was due on or before March 30,

Nonetheless, iCreate’s four annual reports between 2019 – 2022 show that it has never disclosed the top 10 shareholders, directors, senior managers, and connected persons in any of those reports. Even the 2021 audited financials didn’t have the shareholder information attached to the posting on the JSE website. This begs the question as to why the JSE’s RMOD is only cracking down on iCreate for issues that have been longstanding and somewhat common in the market.

When iCreate was suspended in August 2023 for its late audited financials and subsequently submitted it in September, the JSE maintained the suspension over the absence of a mentor for the company. However, iCreate has not had a mentor since April 2020 and had only appointed Colando Hutchinson in October to satisfy that requirement.

Even iCreate’s share capital has been in breach of the $500 million limit since December 2022 and there has been no mention of that issue.

One of the five largest companies on the JSE did not publish its directors, executives and connected persons shareholdings in its quarterly reports during the first half of 2022 and the company was not suspended or penalised in any regulatory reports. Even another Main Market company has not published any shareholder disclosure information along with its audited financials for three consecutive years based on its interpretation of JSE rules and has not been sanctioned.

While it is yet to be seen what is next for iCreate, there are questions that need to be answered surrounding compliance of all listed companies and not a select few.

Changes coming for annual submissions

As more member-dealers/brokers and listed companies continue to be late in filing their audited financial statements and annual reports, the JSE has begun discussions to address the issue which has become a common theme across the market since March 2020. Prior to the COVID-19 pandemic, less than probably five audited financial statements were late and only a few annual reports were late in 2019. More than half of audited financials were submitted late within the last year. Thirty-five per cent of companies are late in submitting their financials during the 60-day window this year so far.

“Arising from the discharge of the abovementioned regulatory activities, the Jamaica Stock Exchange is satisfied with the state of compliance to the rules of the Exchange by Member/Dealers and Listed Companies as at the end of the month January 2024. The exception, however, relates to the timely filing of Audited and Annual Reports by listed companies and member-dealers, which is a matter that is being reviewed by the JSE. It is expected that the review will be extended to our external stakeholders in 2024 to inform recommendations to address the concern,” stated the RMOD report.

Ideal Securities Brokers Limited’s 2023 annual return was outstanding at the end of January with another broker submitting on time. Twelve companies are currently late in submitting their audited financial statements, notwithstanding extensions and filing within the 90-day window. As a result, investors in firms like Caribbean Assurance Brokers Limited and VM Investments Limited have had no financial update on the companies since November for the September 2023 period. Barita Investments Limited’s 2023 annual report which was due on January 31 is still pending with no subsequent updates by the company.