Some shareholders on Monday in Lagos accused the Nigerian Stock Exchange (NSE) of being insensitive to the contributions of retail investors’ in the nation’s economy.
They said that the scheduled de-listing of 20 companies from the NSE without consultation and protection of investors was a disincentive to portfolio investment.
The NSE had in an advertorial issued on Monday in Lagos announced plans to de-list 20 companies from its board in September for failure to meet post listing requirements.
According to some of the shareholders leaders, retail investors had in the past lost billions of naira to the market due to de-listing.
Mr. Sunny Nwosu, National Coordinator, Independent Shareholders Association of Nigeria, said that “the NSE has failed to protect the interest of retail and minority shareholders which contributes to loss of confidence in the equities market”.
Nwosu, who queried the de-listing move, said the NSE should give the companies more time to restructure their businesses, adding that some of them were sourcing for strategic investors.
He said the NSE should not concentrate on collection of listing fees but should work with the shareholders to ensure sanity, sustainable returns on investments and deepen the market.
Nwosu said that shareholders will lose their investment in the scheduled companies de-listing, noting that such investment risks should be shared by NSE, Securities and Exchange Commission (SEC) and the shareholders.
According to him, it is illogical that trustees that brought the companies to the market have never being sanctioned by the exchange for deceiving investors.
He said the NSE did not have an operational investor protection fund that would compensate investors when such delisting of quoted companies occurred.
Alhaji Gbadebo Olatokunbo, founding member, Nigeria Shareholders Solidarity Association (NSSA), blamed the NSE for the companies’ failure to comply with post listing rules and regulations.
Olatokunbo said that the companies’ inability to adhere to listing requirements questioned the NSE’s due diligence conducted on companies before admitting them on its official list.
He said that the de-listing process had compelled some shareholders seek legal action against SEC and NSE over investors’ deceit.
“This de-listing is becoming too much and shareholders are the ones who suffer at the end,” Olatokunbo said.
Olatokunbo also suggested the need for NSE to compel companies seeking listing to provide a funded window on how to protect investors’ in the event of de-listing.
“The move is to minimise investment deceits and unjustified de-listing of companies based on procedural infractions.”
The Quotations Committee of the National Council of the Nigerian Stock Exchange on June 2, approved the de-listing of 20 entities from its daily official list.
It said the de-listing was pursuant to the provisions of the Greenbook (Listing Rules) of The Exchange, specifically Clause 15 of the General Undertaking.
The NSE said that the de-listing was because of their failure to file quarterly and annual financial statements as required under the listing rules and failure to regularise their listing status.
It said that the regulatory action was necessary to protect the investing public from trading in the securities of entities with no current information regarding their financial status.
The companies penciled for delisting are Investment and Allied Insurance Plc; Goldlink Insurance Plc, Pinnacle Point Group; Adswitch Plc; Afroil Plc, Rokanna Industries Plc and IPWA Plc.
Others are West Africa Glass Industry, Nigeria Wire and Cable Plc, Starcomms, Daar Communications, Mtech , Big Treat, G.Cappa and UTC Plc.
The rest scheduled for delisting are Jos International Breweries, Golden Guinea, Stockvis, Capital Oil and Nigeria Sewing Machines.