THE doyen of global financial regulation, Prof Mervyn King, on Thursday urged listed companies to publish summaries of their integrated reports in the print media.
This comes as listed firms prepare to report in accordance with the JSE’s new short-form announcements in print and in full online from January. The abbreviated announcements are likely to hurt financial print media, such as Business Day, Business Report and Sake Beeld, that rely on this advertising revenue.
The JSE said issuers will need to satisfy themselves that sufficient relevant information has been provided to investors.
It has argued that the change was in line with the global move to digital publishing, and that listed companies find it hard to justify the expense as the figures are often historic by the time they hit newsstands.
While an outcry over a move in this direction 12 years ago put paid to the proposal, the JSE said this week a full consultation had been completed. The amendment would kick in from January following approval by the Financial Services Board, which regulates the exchange, the JSE said.
But Prof King told Business Day ahead of his appearance at a financial advertisement awards ceremony on Thursday that while online reporting is a global trend and is to be welcomed, not enough people were online.
"The providers of capital need to know what is going on, and those providers have changed as they are not private families any more," he said. "The majority of providers of capital will not see the report if it is posted online."
He noted pension funds were a large providers of capital and their ultimate beneficiaries were persons in the street who were not on line.
Head of Afrikaans media at Media24, Tim du Plessis, said on Thursday his company had realised "the cheese was moved by the JSE" and had been looking for advice on how best to get around the problem.
Peter Bruce, publisher of BDFM which owns Business Day newspaper, said while the JSE was perfectly within its rights to make its own listing rules, it was a simple fact that after January 1 information about listed companies would be less easy to access for the majority of people on whose behalf pension funds were invested in listed companies.
"The JSE will say the print industry should have anticipated the rules change, but it dropped the issue for nearly 10 years before rushing it through in a six month whirlwind, without bothering to allow us to see out the financial year, once Russell Loubser left," Mr Bruce said.
"At least, I suppose, we know now where we stand. I doubt most listed companies do. Whatever they were paying for print advertisements they will soon be paying in all sorts of charges to the JSE," he said.
John Burke, director of issuer services at the JSE, said the stock exchange was not flouting any requirements around transparency and that publication of company results in the press would not deliver full transparency anyway. He said that it was all about prices and if that was achieved electronically the day before, there was no need to republish the results in full in the press.
Prof King said he was not convinced that the "bibles" — the hundreds of pages of annual reports sent to shareholders — were read in full. A clear reflection of an integrated report in a newspaper would serve to inform people about the state of play in a company, even serving as a useful marketing tool.
JSE CEO Nicky Newton-King said that media houses should approach the upcoming new rules on company results reporting as an opportunity rather than consider financial losses they might incur from their implementation.
"Of course we have considered financial implications on media houses and others. We have had a 10-year discussion now with all the industry, all the stakeholders, to look at what the purpose of reporting is," Ms Newton-King said.
With Ntsakisi Maswanganyi