Reports from the Nigerian Stock Exchange (NSE) have shown that a total of 77 companies have been delisted in 10 years.
Delisting involves removal of listed securities of a company from a stock exchange where it is traded on a permanent basis.
According to the report, 77 companies were delisted on NSE from 2006 to May, 2016. A review of the list showed that 12 of the companies chose to delist voluntarily; 54 delisted due to regulatory instruction; while 11 of the companies delisted due to reforms/expansion within the sectors they operated.
Checks conducted by LEADERSHIP revealed that most of the companies delisted voluntarily from the bourse had cited harsh economic climate and parent company buy-out as reasons.
While stockbrokers said the companies were being delisting for recurring and possibly irredeemable inability to comply with the listing requirements of the Exchange, especially in the areas of timely and accurate rendition of operational and financial accounts and other corporate governance issues.
Shareholders have bemoaned the delisting of listed companies by the regulatory authorities, saying it does not augur well for average investors and the nation’s capital market.
The general secretary of the Independent Shareholders Association of Nigeria (ISAN), Mr. Adeleke Adebayo urged capital market regulators to allow those listed companies that are not meeting the post listing requirements to remain a ‘public focus.’
He argued that institutional investors may develop interest in such companies and decide to invest in them.
“We are losing a lot of money in the market. Nobody is thinking of giving forbearance to investors. We need to make some price adjustments not to continue to delist companies because it is not good for average investors. Let it remain a public focus. Some investors can develop interest and invest in these companies,” he said.
Meanwhile, the CEO of NSE, Oscar Onyema noted that good corporate governance will ensure the existence of solid companies in Nigeria.
According to him, the idea of forcing companies to list on the nation’s bourse may lead to infractions in the market, adding that a lot of energy has been committed in building the foundational aspect of the market in terms of transparency, orderliness, fairness, disclosure, and enforcement of rules and regulations.
“In the short term, you will see the huge volatility but that should not distract from those fundamental elements about good companies, making good money, running under a well governed Exchange structure and a well regulated market structure. These factors will combine to shore up investors’ confidence in these challenging times,” he stated.
Some of the companies that have been delisted from the NSE in the past include, Jos International Breweries, West Africa Glass Industries, Navitues Energy, Nigerin Ropes, P.S Mandrides and Company to name a few.