A total of 109 quoted companies have been delisted from the official list of Nigerian Stock Exchange (NSE) since 2002, according to reports
Findings showed that while some firms were delisted for violating post-listing requirements or due to merger and acquisition, others, however, chose to delist voluntarily when they no longer have the capacity to play in the market.
It was also found out that most of the companies delisted cited harsh economic climate and parent company buy-out as reasons.
Some of these companies that have been delisted due to one reason or the other include Pinnacle Point Group Plc, Afroil Plc, Starcomms Plc, Big Treat Plc, Starcomms Plc, Nigeria Wire & Cable Plc, Nigerian Sewing Machine Manufacturing Plc, Stokvis Nigeria Plc, Jos International Breweries, West Africa Glass Industries Plc, Navitues Energy Plc, Nigerin Ropes Plc, P.S Mandrides Plc, African Paints (Nigeria) Plc ,Afrik Pharmaceuticals Plc, among others.
Six companies have so far been delisted in the current year.
They include Great Nigeria Insurance Plc, Diamond Bank Plc, New Rest ASL Nigeria Plc, First Aluminum Nigeria Plc, Skye Bank Plc and Fortis Microfinance Bank Plc.
The NSE in an effort to achieve a world class capital market had reiterated its commitment to maintaining zero tolerance posture on dealing member firms and quoted companies on violations of rules and regulations.
This is on the back of the exchange’s determination to shift gears to drive innovations centered on increasing global visibility for the Nigerian capital market in the current year.
The Chief Executive Officer of the Nigerian Stock Exchange (NSE), Mr. Oscar Onyema, while speaking at an investors’ forum, had said the exchange would sustain its zero-tolerance stance on dealing member firms and listed companies’ violations.
Reacting to the development, shareholders lamented the delisting, noting that it signaled lack of protection of shareholders’ funds.
The shareholders, who lamented that investors, especially domestic retail investors, always suffered significant losses whenever companies were delisted, said there was the need for the exchange to provide more information about how it arrived at its decision.
The Chairman, Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie, said: “Unfortunately, the Nigerian Stock Exchange is not communicating with shareholders. As they delist these companies, they don’t care for the fate of shareholders that they are meant to protect.”
Okezie argued that while the exchange said it was protecting the shareholders, the move is, however, detrimental to shareholders in the long run, especially if the companies were going concerns but were just having difficulties submitting their financials.
Okezie, who described the move as hostile, said there were many questions left unanswered.
He said: “The NSE needs to go all out to find out the exact state of the companies. To find out if they can overcome their problems in a short while rather than taking the hostile decision to delist them.”
Okezie said that market regulators must pursue friendly policies and initiatives to push the market forward.
He said that the nationalisation of banks to a large extent affected investor confidence in the market.
He said that the current leadership of SEC and NSE had done well with the introduction of various initiatives and zero tolerance against fraudulent capital market operators.
Shareholders under the aegis of Independent Shareholders Association of Nigeria (ISAN), who also bemoaned the delisting, said it did not augur well for average investors and the nation’s capital market.
National Coordinator Emeritus, ISAN, Sir Sunny Nwosu, said: “Yes, there are some of the companies that look dilapidated and there are some for which I think they (the exchange) should have done a lot of consultations, especially with the shareholders because we have suffered a lot in the system.”
He said that there was need for friendly policies and regulation by capital market regulators.
Nwosu said that lack of proper compensation to investors that lost their funds during the market meltdown contributed to poor investor confidence in the market, whereas brokers were given forbearance package.
Mr. Moses Igbrude, ISAN Secretary, noted that issue of penalties must be readdressed by market operators for confidence building.
Igbrude said that some companies had delisted from the exchange due to penalties while new companies were afraid to list.