by Stanley Azuakola
Now that the Securities and Exchange Commission (SEC) has given the go-ahead, eight firms are set to be delisted this November from the official list in the Nigerian Stock Exchange (NSE). They were found liable of not meeting post listing requirements of the NSE.
The eight firms are Aluminium Manufacturing Company of Nigeria (Plc), Capital Oil Plc, W.A. Glass Industry Plc, Union Dicon Salt, Hallmark Paper Products Plc, Nigeria Wire Industry Plc, Rokana Industry Plc, Lenards Nigeria Plc, and Udeofson Garment Factory (Nig) Plc.
One of the firms marked for delisting, Capital Oil, was recently indicted by a committee set up by the Federal Government to probe the regime of oil subsidy in the country. That committee, which was headed by Aigboje Aig-Imokhuede, disclosed that Capital Oil received the sum of N10 billion without supplying a litre of fuel to Nigerians.
This information on the delisting was contained in an NSE notice to investors, in which it said the persistent non-compliance of those firms with the post listing rules of the Exchange was responsible for the resolve to delist them and the consequent endorsement by the council on May 31, 2012.
The Chief Executive Officer of NSE, Mr Oscar Onyema, had recently disclosed that some non-compliance firms would be delisted as soon as a SEC approval can be obtained.
In April this year, the NSE unveiled an “X-Compliance Report”, which was designed to keep track of the compliance level of quoted companies, all in a bid to enhance transparency and disclosures; the “X-Compliance Report” also informs the investors when a company is embarking on capital reconstruction, voluntary or regulatory delisting or restructuring.
Two months after the release of the “X-Compliance Report,” about 30 companies were identified as operating below listed standard in the Nigerian market. This led to the full suspension of 13 companies for failing to meet post listing requirements.
Informing the public about the suspension then, the NSE said that the affected companies were suspended because they did not submit their financial results for the year ended December 2010. This failure to render financial statements at the expiration of the accounting year, according to the NSE, was a clear violation of the post-listing rules of the Exchange, as contained in Key Issue No. 5 (Annual Accounts Procedures), which states that “audited annual accounts of companies ought to be submitted within three months of the year end.”