According to information available on the Nigerian Stock Exchange website, about six companies are in the process of delisting their issued share capital from the Nigerian bourse. This follows the delisting of a total number of seven companies between January and November this year. On this week’s company profile, we shall be focusing on these companies as we try to understand why they could soon be gone from the NSE.
Why companies delist
There are two main reasons why companies delist from the NSE. The first one entails punishment for companies who violate NSE’s listing rules. The NSE periodically fines defaulting companies, whilst demanding that such companies address their corporate governance lapses. As Nairametrics reported recently, the latest X-Compliance report showed that the NSE made as much as N143.6 million in 2019 by imposing fines on defaulting companies.
But sometimes, fines are not just enough. The NSE is often forced to voluntarily delist companies whose infractions have become persistent.
Amino International Plc is also in the process of delisting primarily because it abused NSE rules by not disclosing its quarterly financial statements since 2015 till date. The company, which engages in manufacturing of different kinds of personal and industrial products, was incorporated in 1981 and listed on the NSE in 1990.
Roads Nigeria Plc is a civil engineering firm that is in the business of construction of roads, bridges, dams, airfields, and real estate. The company was incorporated in 1974 and is headquartered in the Northern Nigerian city of Sokoto.
Unfortunately, the company has not released its quarterly financial statements since 2014. This is a major violation of the NSE listing rules which could result in the company being delisted soon.
The delisting of the Tourist Company of Nigeria Plc from the Nigerian Stock Exchange may be a voluntary move by the company’s owners. The company has recently been plagued by ownership tussles, with some shareholders calling for it to be liquidated. The hospitality company was incorporated in 1964.
DEAP Capital Management Trust Plc was incorporated in 2002 and listed on the NSE in 2007. It is unclear whether its delisting is voluntary or regulatory. However, it appears the company is struggling financially as its latest financial disclosure shows.