Tanzania: DSE scraps National Investments Company Limited

The National Investments Company Limited (Nicol) has been delisted from the Dar es Salaam Stock Exchange (DSE).According to a DSE announcement, the company is officially out of the list of firms that trade their shares at the 13-year-old bourse.

“The DSE wishes to inform the public that as per DSE Governing Council directive issued on 31st May, 2011, the National Investments Company Limited (Nicol) has been delisted from the DSE, effective 6th June 2011,” reads a statement posted on the DSE website.

This decision comes in the wake of Nicol’s non-compliance with the country’s listing obligations.
“In the first place, Nicol has not presented to us its audited financial statements for the past two years (2009 and 2010)…..the company has also been making some serious decisions without seeking the consent of the DSE as required by any listed company…..we understand that existing investors will now find it difficult to exit from the company, but we had no option but to take that step,” the DSE chief executive officer (CEO), Mr Gabriel Kitua, said yesterday.

For example, he said, Nicol decided in February this year, to sell some of its shares in the National Microfinance Bank (NMB). Nicol owns 6.6 per cent of shares in the bank but, according to the DSE, it was improper for the company to sell its shares in NMB without the consent of DSE.

“Nicol’s value is determined by, among other factors, its shares in the NMB and therefore, deciding to sell the shares without approval of the DSE would have an impact on the company’s operations at the bourse….we therefore decided that time was ripe they stayed out of the market so they may come back as a fresh company,” said Mr Kitua.

Having been delisted, leaving the DSE with 10 local firms and five cross-listed companies, Nicol will now be required to reapply and undergo all the formal listing processes. These include preparing a new prospectus (just like any other new company) before being readmitted.

In a quick rejoinder, however, the Nicol chairman, Mr Felix Mosha, told the reporter that his company had not been informed about the decision, and requested this reporter to go to his office and have a look at the many correspondences between Nicol and the DSE.

“What I do know is that we have been in continuous discussions with the DSE…..you are free to come to our offices and see the letters that we have been writing to the DSE and vice versa,” he told The Citizen on the phone.

The bone of contention between the two institutions dates from 2009 when the Capital Markets and Securities Authorities suspended Nicol from trading at the Dar bourse after it failed to tell its shareholders that a pharmaceuticals company in which it has a 51 per cent stake was put into receivership in 2008.

This forced the DSE, Capital Markets and Securities Authority, National Board of Accountants and Auditors and Business Registrations and Licensing Agency to publish a joint statement calling on the resignation of the company’s directors.They also ordered Nicol to prepare its financial statements in line with international reporting standards and recall earlier statements for the financial year ended December 31, 2008.

But, according to Mr Kitua, the firm’s financial statements for 2009 and 2010 seem not to be forthcoming.
However, Nicol’s corporation secretary and legal counsel, Mr Herbert Nyange, was last month quoted by an English daily as saying that he saw no way for the company to comply with the DSE regulations while their boards of directors and chief executive officer have been suspended by the CMSA.

Nicol, through renowned advocate Nyange, was reportedly urging in the letter to Mr Kitua that the firm and its auditors produced and the board approved the 2009 accounts in a timely manner.

However Nicol that the accounts could not be published or submitted to the DSE due to CMSA’s decision.
The delisting of Nicol scraps DSE of a market capitalization worth Sh16.95 billion. The company has listed a total of 69.178 million shares.