02/04/2012 (The Nation) - Not less than N250 billion in investors’ funds are stuck in 31 companies that were involuntarily delisted by the Nigerian Stock Exchange (NSE) as the market grapples with the aftermath of the bubble pricing that characterised pre-2008 boom period.

The NSE had in several batches invoked compulsory delisting to clear what it considered as irredeemably inactive companies. In spite of clear indications of inactivity and failure to submit their annual and quarterly reports and accounts for several years, the NSE had allowed the companies to remain on the official list to attract investors’ funds during the boom period.

With the criticisms that trailed the capital market depression, NSE embarked on mass compulsory delisting of the companies that were adjudged moribund.

The Exchange has so far delisted 31 companies, which were estimated with capitalisation of about N250 billion in the wake of market decline in 2008.

Aggregate market capitalisation of all quoted companies opened February 2008 at N10.69 trillion. Market analysts indicated the delisted companies accounted for not less than two per cent of aggregate market value of the equities then.

The delisted companies included Okitipupa Oil Palm, Grommac Industries, Incar Nigeria, Intra Motor, Rietzcot Nigeria, Albarka Air, Aviation Development Company, Ceramic Manufacturers Nigeria, Wiggins Teape Nigeria, Onwuka Hi-Tek, Beverages West Africa, Ferdinand Oil, Foremost Diaries, Tate Industries, Footwear and Accessories Manufacturers, Aboseldehyde Laboratories, BCN, Christlieb and Maureen Laboratories.

Others included Epic Dynamics, Liz-Olofin and Company, Nigerian Lamps Industries, Niyamco, Oluwa Glass Company, West Africa Glass Industtry, Aba Textile Mills, Asaba Textile Mill, Enpee Industries, Flexible packaging, Krabo, NewPak, Nigercem and Tropical Petroleum.

Most of the companies attracted substantial secondary market values in spite of absence of fundamental figures to back their operations.

For instance, Wiggins Teape Nigeria, where Nigerians owned 60 per cent equity stake, was actively traded and opened February 2008 at N1.27 per share while its last dividend was in 1997. At the point of delisting, Albarka Air was valued at some N1.74 billion. Oluwa Glass, whose last dividend was in 1996, was trading at a high of N1.44 during same period.

President, Nigeria Shareholders Solidarity Association (NSSA), Chief Timothy Adesiyan, blamed capital market regulators for allowing investors to walk into booby traps of moribund companies.

He said the NSE and the Securities and Exchange Commission (SEC) must take up responsibilities to ensure that small and retail investors’ interests in the delisted companies are protected.

According to him, the compulsory delisting was seen by several core investors in the delisted companies as a blessing in disguise as they have never made efforts to reach out to shareholders.

He said several unsuspecting shareholders were lured into buying shares in the companies.