Investors at the Nigerian Stock Exchange have registered their displeasure over the high level of penalties imposed on quoted companies.
Some investors, who spoke to our correspondents, said the proposed issuance of the electronic annual report, should not be made mandatory but optional.
According to them, failure to re-invest unclaimed dividend funds into special funds, which also attracts a fine, should be looked into.
Several shareholders, who complained on the issue of incessant penalties on quoted firms, said it discouraged companies from seeking quotation on the nation’s bourse, thereby affecting the growth and development of the market.
They, however, urged the Securities and Exchange Commission and the NSE to review the various penalties in order to attract new listing and boost investor confidence.
The President, Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie, said the fines were becoming counter-productive, making some companies to consider delisting, as an option.
“In fact, the way regulators are charging fees and imposing fines on companies is becoming a big risk to our investments in the market. Many companies are delisting because of this situation.”
National Coordinator Emeritus, Independent Shareholders Association of Nigeria, Chief Sunny Nwosu, said that there was a need for friendly policies and regulation by the capital market regulators.
Nwosu said lack of proper compensation to investors that lost their funds during the market meltdown contributed to poor investor confidence in the market, whereas brokers were given forbearance package.
He also frowned at the commission’s move to invest the unclaimed dividend funds into special funds, saying that shareholders were not in support of the initiative.
He noted that the proposed issuance of electronic annual report should not be made mandatory, but optional, and that the law stipulated that annual reports must be posted to shareholders 21 days before the Annual General Meeting.
Commenting, Mr. Moses Igbrude, the ISAN Secretary, said some companies had delisted from the Exchange due to penalties while new companies were afraid to
list.
He, however, called on the regulators (SEC and NSE) to encourage the companies to embrace the share buyback initiative, instead of approving share reconstruction for companies used in robbing investors.
Meanwhile, the Nigerian Stock Exchange expelled no fewer than 22 companies between 2016 and 2017, over non-performance and failure to meet the required post-quotation standards.
Delisting is the process of removing a company from the official list of the stock, either voluntarily or by compulsion.
Seven-Up Bottling Company, African Paints and Afrik Pharmaceuticals were delisted this year, while Cappa and D’Alberto, Intercontinental Bank Preference shares, IPWA, G Cappa and West African Glass Industries were among the companies delisted in 2016 and 2017 respectively.
The Chief Executive Officer, NSE, Oscar Onyema, said recently that companies in their life cycle would be listed, while others would be delisted over time.
Onyema said the development was the reality that exchanges around the world experienced.
“Companies will delist for different reasons -from voluntary to regulatory delisting, while mergers and acquisitions and other things could also cause them to delist,”
he said.