SEO Rates Corporate Transparency

The Securities and Exchange Organization has rated 302 exchange-listed companies based on their transparency for the five-year period ending Sept. 21.

The report, published earlier this week, is a step forward for Iranian markets, in which data for making informed investment decisions is scarce.

The market regulator has rated each company on the timeliness and reliability of their earnings reports, financial statements and other corporate data. This is the first time anyone is rating corporate transparency in Iran, SENA reported.

Companies that have delayed the release of information, missed earnings targets or had discrepancy between their audited and unaudited books got lower ratings.

The companies were scored from zero to 100, while negative scores were also possible. The companies were rated in three categories: timeliness, reliability and overall information dissemination.

Petroleum companies and automakers, along with banks and credit institutions, were the least transparent groups of companies, according to the report. These three groups make up the bulk of Iranian markets and have the largest impacts on indices and overall market sentiment.

For example, two major Iranian lenders, Pasargad Bank and Post Bank of Iran along with Esfahan, Bandar Abbas and Tabriz refineries are the bottom 10 companies.

On the flip side, tech companies, along with pharmaceuticals, cement and plaster producers, came out on top in the SEO ranking.

Iranian officials are learning the need for transparent and reliable markets, and are taking more action to create trust.

SEO is currently pursuing the introduction of ratings agencies, trying to reduce delay in the dissemination of data and get more information from companies.

However, it still has a lot to do to create confidence in markets. Shady dealings, delay of information, insider trading and market manipulation are still relatively easy to carry out in the current environment.

The organization itself is not above criticism. Last month, as SEO mandated the monthly release of basic sales data for listed companies, a group of investors leveled allegations of market rigging at the regulator and brokerage.

Investors criticized market crashes and regulations that allegedly benefit brokerages and their larger clients in initial public offering, at the expense of small investors. SEO showed no reaction to the public outrage.