Hutchings Biemer and A Baumann will no longer trade at Nairobi Securities Exchange

The trading floor at Nairobi Securities Exchange. Only 12 companies will now trade under the commercial and services sector after Hutchings Biemer's exit. [Beverlyne Musili, Standard]

Furniture retailer Hutchings Biemer and investment and trading firm A Baumann have finally been delisted from the Nairobi bourse.

The striking off of the two companies from the roll of Nairobi Securities Exchange-listed firms Thursday ended one of the longest suspensions of any listed firms by the Capital Markets Authority (CMA).

Hutchings Biemer was under suspension for 16 years while A Baumann had been on CMA’s blacklist for eight years.

“Notice is hereby given on the mandatory delisting of Hutchings Biemer Ltd from the NSE effective August 31, 2017. This follows failure by the company to adhere to regulatory requirements from the year 2001, when the security of the company was suspended from trading on the NSE and the subsequent approval of the delisting by the CMA,” a notice by NSE read.

The exit of the two firms now leaves Atlas Development and Support Services Ltd as the only company under suspension.

The exit of the South African furniture retailer means only 12 companies will trade under the commercial and services sector of the bourse while the investments sector will have five companies after the departure of A Baumann.

The new development comes as a major blow to CMA that has been struggling to attract more firms to the stock market.

Hutchings Biemer, which prior to its suspension had tried to delist voluntarily, was stopped from trading at the bourse on February 5, 2001.

The furniture retailer was targeted by the regulator for trying to withhold the wealth of investors who were opting out of the bourse.

It was also singled out for not complying with disclosure requirements by the CMA.

Hutchings Biemer had about 153 shareholders at the time of suspension, with its share trading at Sh20.25.

A Baumann, on the other hand, had 381 shareholders and had its share trading at Sh11. It was suspended for failing to disclose its full financials in 2008.

The net effect of delisting on shareholders is that their securities can no longer be traded on the securities exchange.

Shareholders of a delisted company, however, continue to hold the same number and type of shares. Their rights also remain the same, including participation in any future dividends declared by the company.

Some of the accruing benefits of delisting is that it reduces expenses related to maintaining a listing on the NSE for firms and it also frees it from being regulated by the bourse and the CMA.

The exit of both companies comes barely three months after car dealer Marshalls East Africa applied to delist from the bourse after accrued losses.

The company’s major shareholder, Global Limited, which has a 13.9 per cent stake, was behind the delisting, offering to pay off minority shareholders who did not want to remain in the unlisted firm at Sh10.75 per share.

Another car dealer, CMC Holdings, also suffered the same fate in September 2011 until Dubai-based Al-Futtaim Group came on board and successfully took it off the bourse in 2015.

Carbacid was also put under suspension for almost five years until its shares resumed trading in November 2009.

Sisal producer Rea Vipingo, which had for years been at the centre of hostility between rival management functions angling for its takeover, was also delisted in 2015.

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