The Term “Delisting” is the removal of a security from the official list of a stock exchange on which the company trades.
Reasons Why Companies are Delisted
Companies are delisted for recurring and possibly irredeemable inability to comply with the listing requirements of the Stock Exchange, especially in the areas of timely and accurate rendition of operational and financial accounts and other corporate governance issues. Once delisted the security ceases to be traded on the exchange.
Process of Delisting In Nigerian Stock Exchange
- The Quotation Committee of the National Council of the NSE, which presides over listing and delisting of companies, approves the delisting of companies at a particular point in time.
- The final delisting approval 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.
- The final delisting process outlines the step-by-step delisting process and implies an ongoing engagement of the affected company on the timeline for compliance with listing requirements in default.
- Under compulsory delisting, the authorities at the NSE will at a specified date, after completion of the delisting process and approvals, will delist the shares of the affected company without any further recourse to the position of the board or shareholders of the affected company.
- Voluntary delisting 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.
Examples of companies that have been delisted from the NSE in the past include; Jos International Breweries, West Africa Glass Industries Plc, Navitues Energy Plc, Nigerin Ropes Plc, P.S Mandrides and Company Plc to name a few.