NSE: Investors may lose N67.344bn in five delisted firms

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..Shareholders’ fate depends on coys’ managements—Onyema

..Regulators not investor friendly—Shareholders

 

 

By Ngozi Amuche

There are indications that shareholders of five delisted firms may have lost their N67.344billion worth of investments in 2019, on the Nigerian Stock Exchange.

These indications emerged just as stakeholders stressed that the capital market had continued to underperform, despite all efforts by the management of the NSE to restore investor confidence.

Delisting is the process by which a listed security is removed from the Exchange on which it trades. A company can voluntarily ask to be delisted to become privately traded, while a particular stock may also be removed from an exchange because the company for which the stock is issued is not in compliance with the listing requirements of the Exchange. Others can also be removed, either by merger or by acquisition.

The affected companies are Diamond Bank Plc, Great Nigeria Insurance Plc, Dana Group Nigeria Plc, Newrest Plc and Chellarams Plc.

Investigations revealed that shareholders of Diamond Bank, who either bought the shares of the company through Public Offer or in the primary market, appeared to have witnessed the delisting of the entire ordinary share capital of the bank, valued at N56.048billion, from the Daily Official list of the Exchange, following the merger with Access Bank Plc.

Great Nigerian Insurance Plc lost N1.913billion market capitalisation, following the delisting of the entire 3,827,485,380 ordinary share capital. Other affected companies are Dana Group Plc (N4.5billion); Newrest ASL Nigeria Plc (N4.342billion); and Chellarams (N540million), all in 2019.

Regulators not investor friendly – Shareholders

President, Avid Shareholders Association, Mr. Abayomi Obabolujo, accused the regulators of the market of not being investor friendly.

He said, “The regulators of the stock exchange cannot be talking from two sides of their mouth. They keep saying that they want to deepen the market by looking for more companies to list and at the same time, they are also quick to delist the existing ones for one reason or the other.

In my opinion, I think that what they should rather do is to look for a better method of making those companies comply.

“They should work with the shareholders and the Securities and Exchange Commission, to determine what could be done to ensure that those bad management and Board members of non-performing companies are removed so that the companies can still continue to operate. What I am saying is that there is a need for the NSE to call an all-parties’ meeting, which will provide a broad-based discussion.”

“You cannot just sit in your office and say because these companies have not submitted their reports, they will be delisted. No, if you consult the shareholders, you might at the end of the day be able to remove certain people from the Board of Directors of those companies,” he added.

Speaking in the same vein, the National Coordinator, Pragmatic Shareholders Association of Nigeria, Mrs. Bisi Bakare, said rather than creat