NSE to delist six firms for poor corporate governance

The Nigerian Stock Exchange (NSE) may delist the shares of six companies from the Exchange due to recurring failures to comply corporate governance rules.

A regulatory report at the weekend revealed that the companies have been on the watch-list of the companies that may be delisted for quite some time. Companies in this category include Aso Savings & Loans Plc; African Paints (Nigeria) Plc; Deap Capital Management Plc; Afrik Pharmaceuticals Plc; Evans Medical Plc and Union Homes Savings & Loans Plc.

The latest status report on corporate governance issues indicates that the listed companies were not complying with the NSE’s post listing requirements, and as result of this, the Quotation Committee of the Exchange, which oversees listing and delisting has approved the delisting process of the six companies.

There are two types of delisting form the NSE. A company can on its own seek to be delisted and this voluntary delistment or it may be made to delist compulsorily. Under voluntary delisting, quoted companies can opt to delist their shares from the Exchange due to various reasons, including mergers and acquisitions, restructuring and private interests subject to fulfilment of the delisting rules and requirements.

Under the compulsory delisting window, the NSE may opt to delist companies that have failed repeatedly to meet extant rules and best practices in line with the Exchange’s commitment to protect investors and ensure that listed companies comply with global best practices.

Compulsory delisting is usually done pursuant to clause 15 of the General Undertaking, Appendix III of the Rule Book of The Exchange, which deals with the post-listing requirements and sanctions.

It would be recalled that the NSE delisted five companies in 2017 with four of them delisted under compulsory delisting due to infractions and poor corporate governance. The four companies delisted in 2017 included Beco Petroleum Products; MTECH Communications; Mass Telecommunication Innovation (MTI) and the UTC. Ashaka Cement, which merged with its parent company, Lafarge Africa, was delisted under voluntary delisting option.

Also, in December, 2016, the Exchange delisted six companies, including Lennards (Nigeria) Plc; P.S Mandrides & Company Plc; Premier Breweries Plc; Costain (W.A) Plc; Navitus Energy Plc and Nigerian Ropes under compulsory delisting window. It had earlier in May 2016 compulsorily delisted eight companies including IPWA Plc; G. Cappa Plc; West African Glass Industries Plc (WAGI); Investment & Allied Insurance Plc; ALUMACO Plc; Jos International Breweries Plc; Adswitch Plc and Rokanna Plc.