Regulatory requirements: 27 firms forced to exit Nigerian stock exchange in five years

A total of 27 companies were forced to delist from the Nigerian Stock Exchange between 2016 and 2021, according to data from the Nigerian Exchange Limited.

The data showed that 14 firms underwent regulatory delisting in 2016, four in 2017, two in 2018, two in 2019, one in 2020, and four in 2021.

A regulatory delisting happens when a company is forced to delist itself from an exchange because it fails to meet the listing requirements mandated by the exchange, while a voluntary delisting occurs when a company decides to remove all its shares from the exchange and make it unavailable for trading.

Fourteen companies were delisted from the exchange in 2016. Four companies were delisted in 2017.

Two were delisted in 2018. One company was delisted in 2019, while another one was delisted in 2020.

According to the NGX, the four companies delisted in 2021 was approved by the board of NGX Regulation Limited on Wednesday, April 21, 2021 in line with the regulatory delisting process of NGX and endorsed by the chief executive officer of NGX because of persistent non-compliance with the post listing rules of the Exchange.

In its rulebook, the NGX said, “Listing is always granted subject to the condition that where The Exchange considers it necessary for the protection of investors or the maintenance of an orderly market, it may at any time suspend dealings in any securities or cancel the listing of any securities in such circumstances and subject to such conditions as it thinks fit, whether requested by the Issuer or not.

“The Exchange may also suspend dealings in or cancel the listing of securities where: (a) An Issuer fails, in a manner which The Exchange considers material, to comply with The Exchange Listing Rules; or (b) The Exchange considered there are insufficient securities in the hands of the public; or (c) The Exchange considered that the Issuer does not have sufficient level of operations or sufficient assets to warrant the continued listing of the Issuer’s securities; or (d) The Exchange considered that the issuer or its business is no longer suitable for listing.”