The Nigerian Stock Exchange (NSE) has delisted African Paints (Nigeria) Plc and Afrik Pharmaceuticals Plc from the secondary market, ending more than two decades of public quotation for the ailing firms.
African Paints, which deals in agro-chemicals, general chemicals and paints, was incorporated in 1974 and listed on the NSE in 1996. Imo State-based Afrik Pharmaceuticals was incorporated in 1972 and listed on the Exchange in 1992.
A circular on the firms delisting indicated that their shares were delisted at the weekend following approval of the National Council of the NSE.
The NSE said the firms were delisted after failing severally to comply with best practices as enshrined in post-listing requirements at the Exchange.
According to the Exchange, it had engaged the companies with a view of returning them to compliance level. When the efforts did not yield results, the NSE sent out a delisting notice on October 13, 2016. However, the companies did not take appropriate steps to regularise their listing status.
Further to the exercise, the Exchange notified the companies of its intention to delist them from the daily official list due to their non-compliance with provisions of the Post-Listing Rules on April 11, 2017 through two newspaper publications on April 20, last year.
The Exchange granted them additional three months to cure their compliance deficiencies. But, they failed to take steps to regularise their compliance status within the stipulated time.
“In spite of this, the Exchange continued to engage these companies, but they did not take to the requisite steps to come into compliance, consequent upon the forgoing, the Exchange has proceeded with the delisting of these entities from the Daily Official List,” the NSE stated.
The Nation in an exclusive report last January reported that six quoted companies were under the watch-list of the NSE for compulsory delisting of their shares from the stock market due to recurring failures to comply with international best practices and corporate governance rules at the market.
The report noted that the companies were on the delisting watch-list of the Exchange, a list of companies with serious infractions that require considerable organisational changes to comply with the extant rules at the market. The companies included 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 report indicated that the Quotation Committee of the Exchange, which oversees listing and delisting had approved the delisting process of the six companies.
The NSE operates two delisting windows-voluntary and compulsory delisting. 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.
The NSE had 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 UTC. Ashaka Cement, which merged with its parent company, Lafarge Africa, was delisted under voluntary delisting option.
In December 2016, the Exchange had 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 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.