For defaulting post-listing requirement, the Nigerian Exchange Limited (NGX) has suspended 12 companies so far between 2017 and 2021.
According to NGX, the companies suspended fails to file the relevant accounts by the expiration of the cure period, forcing the management to send to the company a “Second Filing Deficiency Notification” within two business days after the end of the cure period.
Analysts on the capital market have expressed that these companies have performed woefully to filing of result and accounts amid weak corporate governance, economy related factors and inconsistent in government business policies.
The Exchange noted that it suspend trading in the company’s securities; and notify the Securities and Exchange Commission (SEC) and the market within 24 hours of the suspension.
The breakdown revealed that the NGX in 2017 suspended Aso Savings & Loans Plc and Union Homes Savings & Loans for not submitting December 31, 2017 results.
Our correspondent gathered that in 2018, Multi-Trex Integrated Foods Plc , International Energy Insurance Plc, DN Tyre & Rubber Plc and STACO Insurance Plc were suspended for defaulting mostly December 31, 2021 result and accounts.
Meanwhile, three companies in 2019, Goldlink Insurance Plc, Resort Saving & Loans Plc and Standard Alliance Insurance Plc failed to submit December 31, 2019 results.
Medview Airline Plc and Capital Oil also failed in submitting December 31, 2020, while in 2021, The NGX has suspended only one company, Thomas Wyatt Nigeria.
Our correspondent gathered that 21 companies between 2017 and 2021 have delisted from the NGX.
Delisted shares refer to the shares of a listed company that has been removed from stock exchange permanently for buying and selling purposes.
Our correspondent can report that companies delist from the NGX or are forced to delist from the market. The bourse periodically fines defaulting companies, whilst demanding that such companies address their corporate governance lapses.
But sometimes, fines are not enough. The NGX often forced to voluntarily delist companies whose infractions have become persistent.
On the other hand, a good number of companies have also voluntarily delisted from the NSE for various reasons, including the desire to become privately owned entities.
African Paints (Nigeria) Plc, Afrik Pharmaceuticals Plc, Seven-Up Bottling Company Plc, First Aluminium Nigeria Plc, Great Nigeria Insurance Plc voluntary delisted on the Exchange amid shareholders decision
As Newrest ASL Nigeria Plc voluntary delisted from the Exchange, Skye Bank Plc and Fortis Microfinance Bank Plc were delisted by the Exchange in 2019.
UTC Plc, MTI Plc, MTECH Communications Plc and Beco Petroleum Products Plc were delisted by the Exchange in 2017, while Avon Crown Caps and Containers Plc and 11 Plc delisted in the same year over the management decision.
During the delisting of 11 Plc, the management explained that”The purpose of delisting is to enable the Company explore strategic opportunities, alliances and collaborations that can bolster earnings and/or provide synergized benefits with little or no regulatory obligations.”
On exit considerations, the company explained that, “The interest of dissenting shareholders shall be bought by the Company for a consideration of N213.90 per ordinary share, being the highest price at which 11 Plc shares have traded, six months preceding the notice of the AGM at which the resolution to delist was deliberated, as provided by the rules of the NGX. The Financial Advisers and the Board, therefore consider this price fair and reasonable.
“Following the conclusion of the delisting process, 11 Plc will become an Unlisted Public Liability Company (PLC). Shareholders that intend to remain members of an unlisted 11 Plc shall be free to remain and there is no obligation to receive the exit Consideration.
On historical market trading, the company said, “11 Plc is listed on the NSE with average daily trading volume of 48,272.22 shares and average daily value traded of N8,236,994.97 over the last 12 months. The chart below reflects the trading pattern of 11 Plc on the NSE within the six months period preceding the date of notice of the AGM-17th of September, 2020.”
According to the company, “upon the delisting of 11Plc, the shares of the Company will no longer be available for trading on the Main Board of the NSE. It is envisaged that the delisted 11 Plc will continue its operations as an unlisted Public Company.”
The company added that the delisting will not have any impact on the existing employment contracts of its staff, disclosing also that the delisting will not have any impact on the composition of the Board of Directors of 11 Plc.
However, Paints And Coatings Manufacturers Nigeria Plc, Continental Reinsurance Plc, Anino International Plc all voluntary delisted in 2020.
In addition, Unic Diversified Holdings Plc, Roads Nigeria Plc, Nigeria-German Chemicals Plc, Evans Medical Plc were delisted by NGX in 2021.
On the other hand, Omatek Ventures and Deap Capital Management & Trust have been placed on the NGX’s delisting watch-list over their failure to comply with some post-listing requirements, including failure to file their quarterly and annual reports within a stipulated time.