Authorities at the Nigerian Stock Exchange (NSE) have suspended trading in 17 companies over their failures to uphold best corporate governance practices and submit their accounts and operational reports as required.
The suspended companies included African Alliance Insurance Plc, Equity Assurance Plc, Fortis Microfinance Bank Plc, Guinea Insurance Plc, Premier Paints Plc, Resort Savings & Loans, Sovereign Trust Insurance Plc, African Paints (Nigeria) Plc, Aso Savings & Loans Plc, Ekocorp Plc, Evans Medical Plc, Goldlink Insurance Plc, Great Nigeria Insurance Plc, Omatek Ventures Plc, Union Dicon Salt Plc, Union Homes Savings & Loans Plc and Universal Insurance Company Plc.
A source at the Exchange stated that the suspension took effect on Wednesday July 5, 2017 and will continue until the companies submit the relevant accounts.
Authorities at the Exchange had earlier delisted eight companies over what they described as persistent failures of the companies to meet best corporate governance practices as enshrined in the listing rules.
A report obtained by Ripples Nigeria indicated that 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 were delisted during today’s (Thursday’s) trading session, which ended by 2.30 pm.
The notification noted that the compulsory delisting was in line with Clause 15 of the General Undertaking, Appendix III of the Rule Book of The Exchange, 2015, Part II, Issuers’ Rules, which referenced the obligations of quoted companies in terms of regular periodic submission of performance and financial reports, corporate governance and accountability.
The delisting of the companies, the report indicated, was approved by the Quotations Committee of the National Council of the NSE earlier in March 2016.
The delisting implies that the Exchange has concluded and complied with the regulatory requirements in the delisting process including issuance of necessary notices, forbearances, fair hearing and probation without any rectification from the affected company.
Under compulsory delisting, the authorities at the NSE will at a specified date, after completion of the delisting process and approvals, delist the shares of the affected company without any further recourse to the position of the board or shareholders of the affected company. The opposite is voluntary delisting, which is the deliberate withdrawal of the shares of a company from the Exchange by the board of directors, acting on the mandate of the statutory majority of the shareholders.
A source said the companies were delisted because of their inability to comply with the listing requirements of the Exchange, especially in the areas of timely and accurate rendition of operational and financial accounts and other corporate governance issues.