Shareholders Lament As NSE Delists 7 Companies

The Nigerian Stock Exchange (NSE) says it delisted no fewer than seven companies in 2019, the News Agency of Nigeria (NAN) reports.

Data obtained by NAN from the Securities and Exchange Commission (SEC) showed that the affected companies include the Skye Bank Plc and Fortis Microfinance Bank.

Others are the First Aluminum, Newrest, Diamond Bank, Dangote Flour and Great Nigeria Insurance.

A breakdown of the data indicated that Skye Bank and Fortis Microfinance Bank were delisted as a result of the revocation of their operating licenses by their primary regulator, the Central Bank of Nigeria (CBN).

First Aluminium, Great Nigeria Insurance and Newrest entire shares were delisted on voluntary ground.

Specifically, First Aluminium said that its shares had continued to trade at a significant discount to the intrinsic value.

Also, Great Nigeria Insurance was delisted on request from the company that there had been little or no trading acitivity on its shares over the last five years.

Newrest through its Stockbroker, Helix Securities Limited, submitted an application for voluntary delisting of the entire 634 million ordinary shares of the company from the exchange.

According to the company, the voluntary delisting was as a result of its inability to meet up with the 20 per cent free float requirement of the exchange.

Diamond Bank was delisted following its merger with Access Bank, while Dangote Flour was delisted due to the acquisition of the entire issue by Crown Flour Mills Ltd.

Commenting on the development, Mr Moses Igbrude, Publicity Secretary, Independent Shareholders Association of Nigeria, said that minority shareholders were not pleasant with the delisting of companies.

Igbrude stated that companies delisted most times due to unfavourable business environment such as policy summersault, power problem, multiple taxation and infrastructural deficiency.

He said that government, SEC, NSE and other market stakeholders should make deliberate efforts to play their parts to encourage companies to remain listing on the nation’s bourse by reducing listing costs.

According to him, incentives should be given for good performance to encourage listed companies.

He added that private sector should be encouraged in infrastructural developments, noting that ports should be decongested for free movement of goods and services.

Malam Shehu Mikail, National President, Constance Shareholders Association of Nigeria, said that unnecessary fines being imposed on companies by market regulators contribute to incessant delisting on the exchange.

“NSE should always liaise with some of the companies to understand other issues they have with other regulatory bodies in term of compliance.

“We believe as a shareholder that all the regulatory bodies should have ways to harmonise the system of operation among the regulatory agencies so as to ameliorate the system for the companies.

“Nigeria shareholders are mostly affected in the system of delisting by most companies whereby the majority holders can later decide to buy over the stake of minority holders.

“This is part of development that does not encourage minority shareholders and Nigerians to invest in the market,’’ Mikali said.

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