The Nigerian Stock Exchange, NSE, has delisted nine companies from its operations between January and October for mostly failure to comply with regulations.
Delisting involves removal of listed securities of a company from a stock exchange where it is traded on a permanent basis.
Data obtained from the exchange by the News Agency of Nigeria in Lagos indicates that the companies include IPWA Plc, G. Cappa, West African Glass Industries, Investment & Allied Insurance and Alumaco.
Others are Jos International Breweries, Adswitch, Rokanna and Vono Products Nigeria Plc.
Eight of the companies were delisted for regulatory issues while Vono Products was delisted because of its merger with Vitafoam.
Uche Uwaleke, Head of Banking And Finance Department, Nasarawa State University, Keffi, said that breach of post listing requirements, failure to pay the annual listing fee or a company in liquidation were the major reasons for delisting of companies.
Mr. Uwaleke said that non-submission of audited and unaudited reports as required by the exchange increased the chances of delisting.
“Other issues bordering on corporate governance may attract sanctions such as trading suspension which is lifted as soon as the matter is resolved.
“To avoid being delisted, the management of a quoted company should endeavour to comply with NSE post listing requirements,” Mr. Uwaleke said.
He stated that delisted companies should be encouraged to list on NASD over the counter platform to provide a secondary market window for the shareholders of such companies.
Mr. Uwaleke called on the Securities and Exchange Commission to ensure that shareholders of liquidated companies benefit from its National Investor Protection Fund (NIPF) as a way of compensation.
Boniface Okezie, President, Progressive Shareholders Association of Nigeria, said shareholders suffered most whenever a de-list from the exchange occurred.
Mr. Okezie said that market regulators going forward should ensure proper scrutiny of companies before listing and their ability to adhere to post listing requirement.
He said that shareholders must not bear the pain because regulatory agencies were the ones that approved the accounts that attracted investors to invest in companies.