The Ghana Stock Exchange (GSE) has defended its decision to suspend Produce Buying Company (PBC) from the local bourse, saying the move is needed to protect investors.
The GSE on Tuesday August 13, 2019 announced the suspension of PBC from the local bourse, for not being able to publish its financial results and meet some listing requirement.
Suspension of Produce Buying Company
The financial year of PBC, which was previously called Produce Buying Company, ended in September 2018.
The GSE’s notice to suspend the company added that “ Produce Buying Company has also failed to redeem the Tranche P4 of its note program, which matured on December 6, 2018
Part VI of the GSE Listing Rules outlines that a listed company shall comply with the continuing listing obligations and disclosure policy outlined in the Rules.
The prescribed sanctions for failing to abide by that regulation are specified in Rules 13(4)(c) and 13(4)(e) of the Listing Rules.
“Specifically, Rules 13(4)(c) and 13(4)(e) of the Listing Rules empower the GSE to suspend listing or compulsorily de-list securities where the company has failed to comply, or is unable, or unwilling to comply for any reason whatsoever with the Exchange’s requirements on continuing listing obligations and also where the company has failed to comply with its Listing Agreement, or other agreements with the Exchange, or has failed to comply with the Exchange’s Rules and disclosure policy as set out in Parts VI and VII of the Rules.”
Enforcing the Rules for PBC
The suspension could affect market confidence as the GSE is currently struggling to improve listings. The Managing Director of the Ghana Stock Exchange, Ekow Afedzi, however thinks that no matter the circumstance the rule must be applied.
He said, “When you take the case of Produce Buying Company , PBC’s annual year ends in September and since September they have not released their full-year results. Along the line, they’ve sought permission from the regulator for extension and that ended at the end of July. So we decided to enforce the rules.”
The suspension announced by the GSE comes in the wake of recent protests by staff of PBC. They cite their Managing Director, Mr Kofi Owusu-Boateng, and the Board Chairman, Mr Charles B. Ntim, over allegations of mismanagement.
Workers of the Produce Buying Company few days ago embarked on a demonstration at the company’s premises at Dzorwulu in Accra.
According to the staff, PBC has not bought cocoa for a long time. This they believe threatens the survival of the firm.
The staff are calling for a change in management accusing the current management of incompetence. All staff dressed in red as sign of anger and displeasure at the way Produce Buying Company is being managed.
Workers of Produce Buying Company petitions gov’t
Nonetheless, workers of the Produce Buying Company (PBC) Limited in the past week pleaded with the government for a financial bailout to enable the company service its debt and re-profile its short term maturing debt to a longer term.
According to the workers of Produce Buying Company, the bailout would give the company time to recover. This would ensure that PBC becomes a vibrant company again.