Investors lose N17.8bn as NSE delists 8 companies over rules violation

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Investors who invested in eight companies on The Nigerian Stock Exchange (NSE) are to lose about N17.8 billion as quotations committee of The Exchange has finally announced their delisting from its daily official list for violating listing rules.

The delisting of the afore-listed companies was approved by the Quotations Committee of the National Council of The NSE on Friday, 18 March 2016.

The companies are IPWA Plc, G. Cappa Plc, West African Glass Industries Plc (WAGI) and Investment & Allied Insurance Plc.

Other delisted companies include Aluminium Manufacturing Company (ALUMACO) Plc, Jos International Breweries Plc, Adswitch Plc and Rokanna Plc.

Through regulatory action, The Exchange in six years (2010-2016) had delisted a total number of 25 companies, according to Nigerian NewsDirect investigation.

The quotations committee also approved the delisting process of Costain (W.A.) Plc, Deap Capital Management Plc, Evans Medical Plc, International Energy Insurance Plc, Lennards (Nigeria) Plc and P.S. Mandrides & Company Plc from its daily official list.

Others to be delisted include Premier Breweries Plc, Navitus Energy Plc, Nigerian Ropes Plc, MTI Plc and Mtech Plc.

Meanwhile, shareholders of the companies marked for delisting have kicked against the move, expressing that non-submission of quarterly or yearly financial accounts by quoted companies could be a ploy by those who want to exit the market to force the NSE to delist them on its own, thereby escaping the rigours of delisting process, which they claim is cumbersome.

While some of the companies are being delisted for failing to file their quarterly and annual financial reports and accounts with the NSE,  others will face the same fate for failing to regularise their listing status with the Exchange after being given time to do so.

IPWA Plc listed on industrial goods-Building Materials sub-sector contributes N257 million to the NSE’s market capitalisation while  delisting of G Cappa, a construction/real estate company listed under building structure/completion sub-sector, will also wipe N1.8 billion from investors’ investment.

Delisting of another industrial goods- Packaging/Containers sub-sector company,  West African Glass Industries Plc (WAGI) – will wipe N131 million from the market capitalisation; Investment & Allied Insurance Plc, listed in insurance sector will cost investors N14 billion, while Jos international Breweries, another consumer goods listed company’s delisting will deplete investors’ wealth by N809.28 million.

The delisting of ALUMACO Plc will cost investors N557 million.  Delisting of Rokanna Plc and Adswitch Plc will cost investors N30 million and N203.8 million respectively.

Chief Executive Officer, NSE, Mr. Oscar Onyema, recently said that the delisting exercise was not a ploy to emasculate investments of shareholders as some have argued

He said the assertion was erroneous, insisting that the exercise is a testimony to NSE’s commitment to zero tolerance for non-compliance to its post-listing rules and requirements.

“In delisting companies, we have listing standards and we are simply enforcing the standards and the delisting process shows that.

“I want to note that a number of shareholders said that we are not protecting their interest, in reality we are protecting them.

“I am making it very clear that you cannot be a listed company and stayed for two or three years without providing your financial statement. On what basis are they protesting?,” he questioned.

He added that the NSE, like any other exchange, has every right to list and delist companies

Commenting on the companies delisting, The President, Renaissance Shareholders Association of Nigeria, Mr. Olufemi Timothy lamented over NSE decisions at delisting companies without consulting shareholders.

He said, “Shareholders position on delisting of company is that NSE management are wrong is that to delist companies without consulting with shareholders.

“How do we get what we have invested in those companies?  When those companies are delisted, shareholders don’t know what is happening to those companies again.

“What will happen to shareholders funds and investment? The regulator needs to consider all these things before delisting any company. Soon, shareholders will not have access to Starcomms and the rest,” he stressed.

He further said shareholders might challenge NSE decisions in the court of law over its delisting exercise of companies.

“NSE can’t just delist any company at the determent of shareholders. They are some companies that are even happy that they are been delisted with shareholders’ funds.

“They are some companies that will not release their results in order to force NSE delisting them and go away with shareholders’ funds. Very soon, we will take legal actions,” he added

Also commenting, the Chairman, Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie explained that shareholders and economy are the losers in the process of NSE delisting of any company.

In his words apart, “NSE annual listing fees will automatically stop and shareholders will not be able to trade their equities. In all, shareholders are the greater losers.

“A listing company must be able to meet the regulatory body requirement which include prompt disclosure of accounts and inviting shareholders for its annual general meeting.

“When information are been hoarded and are not forth coming to the market, that means the company has failed in its listing obligations.

“It is expected by The Exchange that those companies are moribund and constituting nuisance at the trading floor of The Exchange. The best thing they (NSE) can do is to delist them,” Okezie stated.