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, Nigerian Ropes Plc., P.S
Mandrides and Company Plc. to name a few.
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