The Jamaica Stock Exchange (JSE) has delisted CMP Industries Limited for non-compliance with its rules, effective September 11.

The separation was expected by the market.

CMP was initially suspended from trading six months ago, after its new owner Castelo Holdings failed to comply with stock market rules for a mandatory offer to minority shareholders of the stock.

Castelo bought 80 per cent of the company, whose manufacturing activity had been shuttered years before, and whose only income was from rentals of its warehouse space.

General manager for JSE Marlene Street-Forrest in a press statement said the JSE's regulatory and market oversight committee, was left with no other choice but to delist the stock, saying the company was in breach of five rules under the JSE and Companies Act.

"The JSE made several attempts to work with the company in respect of remedying these violations but was unsuccessful," said Street-Forrest.

CMP was suspended on February 6 this year.

Its failure to make a mandatory offer to shareholders was a violation of JSE Rule Appendix 1, Sub-section 19 on general principles relating to take-over and merger.

The company also failed to: establish an audit committee in accordance with the JSE Listings Agreement; hire a company secretary as required by JSE Rule Appendix 4 and the Companies Act, Section 172 (2); and convene an annual general meeting within the requisite time frame under the Company's Act of Jamaica section 126 (1).

Breach of rules

It was also cited for operating without a registrar and transfer agent contrary to Section 109 of the Companies Act as the fourth and fifth violations.

The difficulties with CMP began last August when Castelo Holdings BV acquired 79.66 per cent shareholding in the listed company giving it ownership of more than 16 million of the over 20.3 million listed units.

The acquisition price was never disclosed, but was considered to be at or around $4.25 per share, the price at which the stock last traded.

susan.gordon@gleanerjm.com