Managing Director of the Ghana Stock Exchange (GSE), Kofi Yamoah has warned five companies on the bourse that they must improve their financial performance or their compliance with reporting requirements as the case may be, before the end of the year or risk removal from the stock exchange.
The new deadline given them is the latest of several that have been set over the past year.
Indeed, this is the latest turn in a long running saga, as the GSE’s Governing Council strives to protect equity investors by ensuring that listed companies apply best practice with regards to corporate governance and provide timely information, as required by stock market regulations to enable investors make informed decisions.
The companies facing the threat of being delisted include Aluworks, Cocoa Processing Company (CPC). Pioneer Kitchenware, Clydestone and Transaction Solutions. The troubled companies on the Ghana Stock Exchange have by December 2018 to rectify their shortcomings or be delisted.
Over the past year or so the companies have been able to avert the ultimate sanction being placed on them by managing to meet whatever minimum compliance requirements required of them ahead of various deadlines, the most recent having fallen during the second and third quarters of this year. However another company, Golden Web has been delisted altogether.
Cocoa Processing Company which was suspended from trading in August 2017 has failed to submit audited financial and operational results for 2015, 2016 and 2017.
As of May 2017, CPC owed a consortium of lending banks some $20m. CPC has told the Stock Exchange, it does not have a full board of directors to sign the accounts compounding its precarious situation regarding reporting requirements.
Aluworks blames its ongoing financial struggles on unfair trade practices submitting that Ghana has become a dumping ground for cheaper aluminum products particularly from Nigeria and China.
The company’s leadership however says they are in talks with two major shareholders towards resolving its working capital difficulties.
Meanwhile, developments last week have provided some encouragement for those that are facing the GSE’s wrath. ICT company, Clydestone (Ghana) Limitedwhich also had been found by the GSE to be in breach of key regulations and consequently put on a watch list has been removed from that list with the bourse issuing a statement last week to the effect that Clydestone and its sibling company, Transaction Solutions had rectified their issues, although both companies still have to get completely out of the woods before year end or still face delisting. This is curious in that the GSE had actually announced earlier that Transaction Solutions had been delisted altogether, along with Golden Web. “The Ghana Stock Exchange has, with immediate effect, lifted the suspension in trading of the shares of Clydestone (Ghana) Limited (CLYD) and Transaction Solutions (Ghana) Limited (TRANSOL) that was imposed on the two companies,” said the formal statement from the GSE last week.
Group CEO of Clydestone, Paul Jacquaye however laments that the original suspension announcement has already damaged the brand’s reputation such that even their foreign partners picked up on it but ruled out delisting on the exchange.
The companies suspended or put on a watch list are accused of failing to submit financial reports, non-payment of annual listing fees, or failure to conduct Annual General Meeting among others.