By Gbenga Agbana   Monday, 6 Sep 2010

Indications emerged on Sunday that the Nigerian Stock Exchange would punish some quoted companies this week, over non-compliance with the post listing requirements of the Exchange.

The sanctions, according to market sources, are prompted by complaints from investors that some quoted companies are not giving their results to the NSE at the right time, while some are not holding their Annual General Meetings as and when due.

The source added that the sanctions were also part of the moves by the current management and council of the NSE to protect investors and restore confidence to the stock market.

Generally, companies listed on the Alternative Securities Market, otherwise known as emerging market, are required to present their results to the NSE at the end of every six months, while those at the first-tier market are required to present theirs every quarter.

It was not clear as at the time of going to the press, the type of sanctions the NSE would impose on the companies, but such strategic decisions are always approved by the council of the NSE.

Sanctions that may be imposed by the NSE include fine, technical suspension and full suspension.

Technical suspension means that the price of the stocks cannot move during trading, while full suspension means that the stocks cannot be traded upon until the suspension is lifted. The highest sanction imposed on quoted companies is delistment from the NSE‘s official list.

Already, the Alternative Securities Market is undergoing some transformation and is being supervised by a deputy general manager.

Prompted by enquiries by our correspondent, the Assistant General Manager, Corporate Communications of the NSE, Mr. Sola Oni, explained that the NSE was poised to enforce the compliance of quoted companies to the post listing requirements, to protect investors.

He said, ”The Exchange‘s preoccupation is to sustain the efforts aimed at reinforcing investor confidence in the market.”

Worried by the non-compliance of some companies in the emerging markets’ sector of the NSE to the post listing requirements, stockbrokers and shareholders had urged the regulators to take the necessary steps to ensure compliance.

To some shareholders, the companies, which were not complying with the requirements of the regulators, should be delisted by the regulators.

The NSE had delisted some companies considered to be moribund or not giving shareholders a clue on what was happening.

 

Source: The Punch