Tanzania: Regulator clears way for NICOL

NICOL still has the chance of getting back to the Dar es Salaam Stock Exchange (DSE) if it improves its governance system and complies with the listing requirements, the capital market regulator said in Dar es Salaam on Monday.

DSE governing council delisted NICOL from the bourse on July 6, 2011 over the company’s failure to submit its 2009 and 2010 financial statements as the market rules and regulations stipulate.

The Capital Markets and Security Authority (CMSA) Acting Chief Executive Officer, Dr Abdiel Abayo could not rule out the possibility of NICOL bouncing back on the tiny bourse provided they improve the accountability and framework of the company.

“I think if they comply with the disclosure requirement and improve their governance, they will be readmitted,” Dr Abayo told the 'Daily News' in Dar es Salaam in response to the possibility of NICOL that touts itself as a vehicle for collective ownership of high return generating economic activities by Tanzanians trading on DSE.

NICOL has become the first company in the 12-year history of DSE to be delisted. The DSE governing council had initially suspended the investment firm pending the submission of the documents before NICOL automatically de-listed itself from the bourse for non-compliance.

During the suspension, the DSE governing council demanded the two consecutive years’ financial reports and details on NICOL’s intention to sell the 22 million shares as part of its stake in National Microfinance Bank (NMB), also listed on the bourse.

But, Dr Abayo assured NICOL shareholders that their investments were safe, arguing that the company still own investments on profitable businesses. NICOL, for instance, owns six per cent of NMB’s total shares worth 425bn/-.

NICOL have always blamed their failure to comply with DSE requirements on the capital market regulator whom they accuse of suspending their board and chief executive officer since last March.

But, CMSA has maintained innocence, saying it has nothing to do with whatever is happening within the company. CMSA-CEO Dr Fratern Mboya was recently quoted as distancing his office from blame, arguing that the company could have appointed an acting CEO to run its operations.

“Who runs the company now,” Dr Mboya was quoted as querying. And Dr Abayo on Monday charged that NICOL’s 2009 financial statements were due for publication in June 2010 and that the suspension of its board of directors in March 2011 could in no way have impeded the disclosure of the statements.

NICOL was also suspended for a month in August 2009 after regulators noticed abnormalities on its financial statement. The company has since its listing in 2008, managed to produce only a single statement whose credibility analysts doubted amid feelings that it was doctored.

With the exit of NICOL, the stock market remains with only ten domestic companies and five cross-listing firms from Kenya.