The Nation Newspaper

Category: Equities

  • US states conditions for investing in Nigeria

    US states conditions for investing in Nigeria

    Nigeria needs to take the tough steps to create an operating environment devoid of corruption, government interference, unethical practices and abuse of the judicial system in order to win international confidence and increase inflow of investments into its economy, the United States (US) has said.

    Speaking yesterday at a forum for some 20 leading American companies and business leaders in Nigeria, US Secretary of Commerce, Penny Pritzker, said American companies would invest in countries that observe the rule of law, follow ethical standards and have good work environments.

    According to her, Nigeria needs to take the tough steps that allow businesses to truly thrive as US companies want to do business in countries that follow the rule of law, maintain ethical standards, abide by workplace safety, encourage workforce training and protect intellectual property.

    She noted that businesses must be able to operate freely and devoid of unnecessary regulation, government interference and corruption stressing that “these are the conditions that will increase confidence among international and local business leaders and encourage further investments in Nigeria”.

    Pritzker is leading 20 American companies on an energy business development trade mission to Ghana and Nigeria.

    She also advised the government to sign the Government Procurement Agreement of the World Trade Organization (WTO) adding that Nigerian government, business and civil society leaders must join hands in developing home grown solutions to challenges facing the country.

    “I believe that together we can, must, and will move toward strengthening our security, promote democracy, spur more trade, investment and economic opportunity to benefit Nigerian citizens,’’ Pritzker said.

    Speaking on behalf of the Nigerian private sector at the same forum, chairman, Heirs Holdings and founder, Tony Elumelu Foundation, called for more investments by the US companies in Nigerian non-oil sectors.

    According to him, while the Nigerian people are proud that their oil is helping to power the biggest economies in the world, the country is about so much more than oil resources and it has buoyant non-oil sectors in agriculture, telecommunications, real estate and hospitality, entertainment, and banking and financial services among others.

    He noted that the trade mission was very strategic and underscores the importance that the US attaches to Nigeria.

    Acknowledging that there have been sectoral reforms, rebuilding of regulatory capacity by the Nigerian Government, Elumelu said efforts are being made to tackle the manufacturing sector which at just five per cent of the national economy still has a lot of room for growth.

    “We need investors and partners and technical expertise to develop our supply chains, infrastructure and work force skills and American firms and entrepreneurs can help us to accomplish this and gain significant value for themselves,”  Elumelu said.

  • CSCS lists shares on NASD

    CSCS lists shares on NASD

    Investors in the Central Securities and Clearing System (CSCS) Plc, the clearing, settlement and depository company for the Nigerian stock market, now has the opportunity to trade on their shares with the listing of the company on the NASD Plc yesterday.

    Formerly known as the National Association of Securities Dealers, NASD Plc is a registered over-the-counter (OTC) trading platform for unquoted securities including equities and bonds. NASD is owned by several investment and financial institutions as well as strategic investors. It is registered by the Securities and Exchange Commission (SEC) as an organized trading platform for unlisted securities.

    CSCS, a subsidiary of the Nigerian Stock Exchange (NSE), listed a total of 5.0 billion ordinary shares of N1 each under the financial industry sector.  CSCS is the 16th securities and eighth financial industry security to be admitted to trade on the NASD.

    With the listing of CSCS on the market, operators and investors can expect to see better price discovery and more transparency around transactions.  It also makes the security more acceptable to portfolio investors who before now only had an informal reference price.

    More companies are making efforts to join the OTC platform in order to beat the June 30, 2014 deadline set by SEC for all public limited liability companies to register their status as a Plc.

    SEC had in February 2014 issued a circular reminding public companies of their obligation to comply with Section 54 (1) of the Investments and Securities Act No. 27, 2007 and Rule 279 (1) (a) of the SEC Rules and Regulations.

    Under these rules, companies that have more than 50 shareholders or who have registered as a Plc with the Corporate Affairs Commission (CAC) must register shares they issue to investors.  The directive also indicated that companies that fail to comply with this market rule on or before June 30,2014 may face sanctions.

    As a result of this rule, many non-registered public companies are trying to complete their registration and avoid such sanctions.

    NASD only trades on fully-dematerialized and freely transferable securities that must have been registered by the SEC, according to admission requirements of the newly inaugurated market.

    A 19-point admission requirement showed that securities will be categorized broadly into two categories or tiers-pink and blue, based on their financial reporting and corporate governance standards.

    Companies under the pink tier are companies with appreciable growth potential but either with little and insufficient information or are too young.  These are somewhat high-risk, high-potential securities. NASD will tag these companies with caveat explaining the conditions of the companies. The blue tier consists of companies with track record of high corporate governance and financial reporting standards.

    However, 13 admission requirements will apply to all securities for trading on the OTC market while six requirements differ, according to the level and categorization of the securities.

    According to the document, all companies for admission on the OTC market must be public limited liability (Plc), registered or exempted from registration by SEC, fully dematerialized and freely transferable and must come onboard through a NASD sponsor or agent.

    Other preconditions for admission include acceptance that the securities must be traded through NASD registered brokers and dealers, opening of an account with the Central Securities and Clearing System (CSCS) and having international securities identification number (ISIN), provision of company ’s business profile and trading history as well as provision of information on profitability and growth prospect.

    Also, the companies must sign on to continuous disclosure of new and any change in their business and corporate information, hold annual general meetings and other meetings and they should hold annual general meeting within nine months of year-end.

    Besides, all companies are expected to have minimum annual revenue equivalent to at least 20 per cent of their shareholders’ funds. The two tiers are also similar in terms of minimum public float, stipulated at 10 per cent of the issued and paid up shares.

    Meanwhile, companies under the pink tier must have been in operations for between one and three years as against minimum of five years required for blue-tier companies. Pink-tier companies are only required to provide audited report while blue-tier companies are required to provide quarterly reports in addition to audited reports.

    Also, companies under pink tier can have minimum of 50 million issued shares and seven shareholders while blue-tier companies are required to have 250 million shares and 150 shareholders.

    While pink-tier companies are not required to have any daily trade and minimum proportion of equity funds to total paid up capital, blue-tier companies are required to have average daily trade of 25,000 and their minimum shareholders’ funds must be equivalent to 50 per cent of their paid up capital.

  • Custodian wins top 25 CEO award

    Custodian wins top 25 CEO award

    Chief executive officer, Custodian and Allied Insurance Plc, Mr Wole Oshin, has been adjudged as one of the top 25 chief executives in Nigeria.

    Oshin was honoured at the Businessday Top 25 CEO Award as one of the top 25 distinguished chief executives of companies listed on the Nigerian Stock Exchange (NSE). The Top 25 CEOs Award is a yearly event which is meant to appreciate the contributions of the 25 CEOs who contributed the most to the growth of the capital market in a particular financial year.

    The Top 25 CEOs were honoured for having contributed 68 per cent of the gains in the capital market capitalisation in 2013. They ensured that their companies’ share price outperformed the All Share Index (ASI) of the NSE which closed the year at 47 per cent.

    According to the panel of judges, the contributions of the top CEOs amounted to 58 per cent of the nation’s budget in 2013. Custodian and Allied Insurance was among the only two companies in the insurance sub-sector which contributed to this achievement. The company worked tenaciously in 2013 to increase shareholders’ profit to N4 billion.

    Commenting on the award, Oshin said the award was a remarkable endorsement of the company’s growth.

    “This is an encouraging development. I am truly elated to receive this award. I would like to state that this achievement would not have been possible without the support of the Board, Management and Staff of Custodian, who worked as a team to get us to this level. We are glad that Custodian is contributing her quota to the GDP of the Nigerian economy and towards the improvement of the insurance sub –sector,” Oshin said.

    Custodian and Allied Insurance, a member of the Nigerian Insurers Association (NIA), is a member of the Custodian and Allied Plc Group, a wholly owned Nigerian investment holding company.

  • Unity Bank’s N19.22b rights issue opens

    Unity Bank’s N19.22b rights issue opens

    Unity Bank Plc at the weekend opened application list for a rights issue of 38.447 billion ordinary shares, starting the first part of a two-part new capital issue that is expected to inject more than N39 billion into the bank.

    The opening of application list followed approvals of the Securities and Exchange Commission (SEC), Nigerian Stock Exchange (NSE) and Central Bank of Nigeria.

    Unity Bank plans would be raising N19.22 billion through a rights issue of 38.447 billion ordinary shares of 50 kobo each to existing shareholders at a price of 50 kobo each. The rights have been pre-allotted to shareholders on the register of the bank as at December 16, 2013 on the basis of one new share for one share held as at the closure date. The rights issue will close in late June.

    The bank will also be undertaking a private placement of 40 billion ordinary shares of 50 kobo each at 50 kobo each to bring in additional N20 billion in new equity funds next month.

    The net proceeds of the new capital issues would be used for new branch development, upgrade of information and communication technology, human resource development, working capital and products and channel upgrade among others.

    Chairman, Unity Bank Plc, Alhaji Lamis Dikko urged shareholders of the bank to pick up their rights noting that the bank’s valuation can only get better.

    “It is a penny stock and it can only get better.  The bank focus is being reinvented considering the background of where we came from, it is been very challenging from the post consolidation period but at least now we have overcome these issues. The bank is set for turnaround,” Dikko said.

    Managing director, Unity Bank, Mr. Henry Semenitari said the new issues would foster the current repositioning of the bank aimed at entrenching better service delivery and profitability.

    According to him, the net proceeds would be judiciously utilized to improve the bank’s processes, procedure and people and strengthen its overall framework to achieve impressive growth.

    “Our journey is very precise as an institution. There were two challenges to driving our growth strategy, one was capital and other was the right size and mixed of man power. On the issue of human capital, as you can see, that has been address. We have a new set of management with new executive directors and non-executive directors in place. On the aspect of capital, it has brought us this far, the importance of capital in business, beyond being regulatory as per capital adequacy, cannot be overemphasized; it is needed to drive the business. As you have seen in the prospectus, the utilisation of the proceeds clearly expressed what we are going to do with the funds,” Semenitari said.

    According to him, the bank is optimistic that it will raise all the funds and there could be over-subscription as some shareholders have started making deposits to take their rights.

    “The offer will be used judiciously to drive our business and we are going to be more prudent. It is a new dawn in Unity Bank. You can see this in our first quarter result. With the network in excess of 245 branches, our retail banking is on track. To be the retail banking of choice in five years, we are working along three parameter-small and medium enterprises (SMEs), agriculture and rural economy. Within SMEs, it involves personal banking and our growth strategy in term of deposit by the year 2016 is that 40 per cent of our deposit base will be in the hands of individuals, which is very sustainable deposit in our book coming from a public sector background. We can assure you that this is a reawakening as a bank,” Semenitari said.

  • Forte Oil, ETI make MSCI Frontier Markets 100 Index

    Forte Oil, ETI make MSCI Frontier Markets 100 Index

    Forte Oil Plc and EcoBank Transnational Incorporated (ETI) have been included in the MSCI Frontier Market Index 100, a global index for the 100 of the largest and most liquid stocks in some 26 countries generally classified as frontier markets.

    The changes were effected following inclusion of 13 securities into the MSCI Frontier Markets Index, while 30 were deleted from the index. MSCI Frontier Markets 100 Index were dominated by Kuwait, 30 per cent from 20 per cent, and Nigeria, 20 per cent from 13 per cent while Pakistan, Oman, Argentina, Kenya and Morocco are now in the range of five to seven per cent, from three to four per cent.

    Analysts said the Forte Oil and ETI in the index would lead to greater inflow of investments, with potential for more than $200 million investments in the Nigerian market.

    The MSCI Frontier Markets 100 Index is designed as the representative and more easily replicable alternative to its broader parent index, the MSCI Frontier Markets Index. With the May 2014 semi-annual review, frontier markets countries now include Argentina, Bahrain, Bangladesh, Bulgaria, Croatia, Estonia, Jordan, Kenya, Kuwait, Lebanon, Lithuania, Kazakhstan, Mauritius, Morocco, Nigeria, Oman, Pakistan, Romania, Serbia, Slovenia, Sri Lanka, Tunisia, Ukraine, and Vietnam.

    The MSCI Frontier Markets 100 Index was launched on Apr 11, 2012 and placed strong emphasis on tradability through three main features of a minimum liquidity level and proportion of shares still available to foreign investors relative to maximum allowed. The 100 largest securities are selected from the eligible universe and ranked by float adjusted market capitalization. About $8 trillion is benchmarked to MSCI indexes. The emerging markets index MSCIEF is up 2.9 percent so far this year, while the all world index has risen 2.1 percent.

    Forte Oil had achieved strong fundamental and technical performances in 2013, a trend it has sustained in the new business year. Its share price had risen by 1164.55 per cent to emerge the best-performing stock, by share price appreciation, at the Nigerian Stock Exchange (NSE) in 2013. It has recorded a year-to-date growth of more than 70 per cent so far this year.

    Forte Oil was also the first quoted company to submit its audited report for the 2013 business year and distributed N4.32 billion as cash dividends to shareholders. Breakdown of the dividend indicated that shareholders received a dividend per share of N4. Key extracts of the audited report and accounts for the year ended December 31, 2013 showed that turnover rose from N90.98 billion in 2012 to N128.03 billion in 2013. Profit after tax also leapt from N1.01 billion in 2012 to N5.0 billion in 2013.

    In the frits quarter of this year, Forte Oil continued in its strides with significant growths in sales and profitability. Key extracts of the unaudited report and accounts of Forte Oil for the three-month period ended March 31, 2014 showed that turnover grew by 30.74 per cent while pre and post tax profits rose by 100.6 per cent and 107.8 per cent respectively.

    The report showed that turnover rose to N34.78 billion in the first quarter of 2014 as against N26.6 billion recorded in comparable period of 2013. Gross profit rose by 72.4 per cent from N2.68 billion to N4.63 billion. Profit before tax doubled from N633.07 million to N1.27 billion. After taxes, net profit stood at N1.10 billion by March 2014 as against N530.60 million recorded in corresponding period of 2013. Basic earnings per share rose from 49 kobo to 75 kobo.

     

     

     

  • Tiger Brands writes off $82m in Dangote Flour Mills

    Tiger Brands writes off $82m in Dangote Flour Mills

    Tiger Brands Limited, South Africa’s largest food company, will write off about half of its investment in Dangote Flour Mills Plc, less than two years after buying a majority stake in the Nigeria-based producer.

    Tiger, which makes Jungle Oats and All Gold tomato sauce, will impair Dangote Flour’s value by 849 million rand, about $82 million, because of “underperformance” and “excess milling capacity that continues to increase in the Nigerian flour market,” the Johannesburg-based company said yesterday.

    The company bought a 63.5 per cent stake Dangote Flour Mills from Dangote Industries Limited in September 2012 for about $190 million, its third purchase in Nigeria. Tiger targeted acquisitions in Africa’s largest economy as it saw limited opportunities in its home market.

    The food producer sees earnings per share for the six months ended March 31 falling as much as 55 percent from a year earlier because of the write-off, it said in a statement. Excluding the impairment, profit from continuing operations will improve 6 percent to 10 percent, Tiger said.

    Bloomberg reported that Tiger Brands’ share price rose by 3.9 per cent, the most since May 31, to 287.67 rand by the close of trading in Johannesburg.

     

  • Consolidated Breweries rewards shareholders with N918m dividend

    Shareholders of Consolidated Breweries Plc yesterday at the company’s annual general meeting unanimously approved a gross dividend of N917.7 million as cash payouts for the 2013 business year. The breakdown indicates shareholders will receive a dividend per share of N1.85.

    Shareholders at the meeting also threw their weight behind the ongoing plan to merge the company with the Nigerian Breweries Plc, noting that this would result in a bigger and better company. They however demanded for fair valuation of their shares in the merger process.

    Speaking at the general meeting, chairman, Consolidated Breweries Plc, Prof. Oyin Odutola-Olurin, assured shareholders that the board is committed to protection of shareholders’ interests, assuring that shareholders will receive adequate value in the merger.

    It will be recalled that managements of Consolidated Breweries and Nigerian Breweries had in a statement on Monday announced plan to merge both entities for better performance.

    Odutola-Olurin said the immediate past year was a truly eventful year as the company achieved several milestones in its journey towards greatness.

    According to her, major achievements included the expansion of the company’s production capacity, the successful merger of Benue Breweries Limited and DIL/Maltex (Nigeria) Plc, the introduction of a new system which improved the controls in business, as well as the introduction of a new bottle for “33” and a variant of Malt drink, the Hi-Malt Choco Twist.

    She also hinted of the plan to use gas to power some of the equipment at the Ijebu Ode Brewery, in an effort to drive down costs.

    Managing director, Consolidate Breweries Plc, Mr Boudewijn Haarsma noted that the company has been integrated into Heineken’s long-term sustainability strategy.

    “We aim to create genuine shared value for all our stakeholders as sustainability is part of how we manage our business”, Haarsma said.

  • Nigerian, global stocks fall on profit-taking

    Nigerian equities turned negative yesterday as investors sought to take profits on highly capitalised stocks that had driven sustained rally in recent trading sessions.

    The main index at the Nigerian Stock Exchange (NSE), the All Share Index (ASI) depreciated by 59.79 points or 0.46 per cent to close at 38 957.47 points as against its opening index of 39 138.98 points.

    Also, total market capitalisation of all quoted equities dropped by N59 billion or 0.46 per cent to close at N12.832 trillion from the N12.891 trillion recorded as opening value.

    The depreciation was largely due to losses recorded in the share prices of some highly capitalised stocks such as Dangote Cement, SEPLAT Petroleum Development Company, Transnational Corporation of Nigeria (Transcorp), FBN Holdings and Guinness Nigeria Plc among others.

    The financial services sector remained the toast of investors as FBN Holding emerged the most traded equity with 54.41 million shares valued at N729.361 million. Zenith Bank placed second with 29.16 million shares worth N683.69 million while UBA accounted for 27.69 million shares valued N203.81 million.

    Meanwhile, United States’ stocks fell a second day, with the Dow Jones Industrial Average sinking the most in a month, as investors continued to sell small-cap shares and Wal-Mart Stores forecast profit that missed estimates.

    The Standard & Poor’s 500 Index lost 0.9 per cent to 1,870.94. The Dow average declined 165.94 points, or 1 per cent, to 16,448.03, its biggest drop since April 10. The Russell 2000 Index of small companies sank 0.7 per cent, trimming an earlier slide of 1.9 percent.

    “The primary sentiment right now is cautious and nervous,” Michael James, a Los Angeles-based managing director of equity trading at Wedbush Securities Inc, said in a phone interview with Bloomberg. “It’s more a matter of capital preservation than it is trying to generate returns. This is a time of caution. More people are looking to make sales and raise cash than they are to put cash to work on the weakness.”

    The S&P 500 has dropped 1.4 per cent since closing at an all-time high of 1,897.45 on May 13. The gauge advanced as much as 4.5 per cent from a low on April 11 amid optimism about the economy and Federal Reserve stimulus.

    The Russell 2000 has lost 3.3 per cent in the past three days following a 2.4 percent rally on May 12. The gauge briefly fell 10 per cent below a March high today. A close at that level would meet the common definition of a correction.

    The Dow Jones Internet Index lost 0.6 percent for a third day of declines. The gauge has plunged 18 percent from a 13-year high in March.

    Economic data yesterday showed industrial production in the U.S. unexpectedly declined in April, held back by a plunge in utilities as temperatures warmed and a broad-based decrease in manufacturing. Manufacturing, which makes up 75 per cent of total production, decreased 0.4 per cent.

    That contrasted with a higher-than-forecast reading on the Fed Bank of New York’s gauge of regional manufacturing, which climbed to 19.01 this month, from 1.29 in April.

    Labor Department data showed the fewest Americans in seven years filed applications for unemployment benefits last week, while a separate report indicated the cost of living in the U.S. rose in April by the most in almost a year.

    “There’s not really any great news here,” Randy Bateman, who oversees $3.5 billion as chief investment officer of Huntington Asset Advisors in Columbus, Ohio, said by phone. “It’s just a slower growing period. Unless we see something that will really drive investor enthusiasm, it’ll be a trading-range market.”

    Fed Chair Janet Yellen said last week that the world’s biggest economy still requires a strong dose of stimulus. While data show “solid growth” in the second quarter, “many Americans who want a job are still unemployed” and inflation remains low, she said. Yellen will address the U.S. Chamber of Commerce after the market closes today.

    Three rounds of monetary stimulus have helped fuel economic growth, sending the S&P 500 surging as much as 180 percent from its 2009 low.

    David Tepper, founder of $20 billion hedge-fund firm Appaloosa Management LP, said he’s nervous about markets as the U.S. economy isn’t growing fast enough amid complacency by the Federal Reserve.

    “The market is kind of dangerous in a way,” Tepper said yesterday at the SkyBridge Alternatives Conference in Las Vegas. “I think it’s nervous time,” he said, adding that markets may “grind higher” in the near term.

    Tepper, 56, who started his Short Hills, New Jersey-based firm in 1993, said he’s more worried about deflation than inflation and that this is the time to preserve money.

  • Unilever Nigeria focuses on long-term profitability

    Unilever Nigeria Plc is making strategic investments and changes that would enhance its long-term competitiveness and profitability, although the immediate impact of these initiatives might constrain returns in the meantime.

    Unilever Nigeria yesterday at its annual general meeting in Lagos unveiled its growth plan to shareholders. While noting the depressed bottom-line in recent years, the conglomerate outlined strategic growth initiatives aimed at strengthening its consumer-centric advantage and ensured it is better placed to provide competitive products through efficient and wide channels at the right prices, irrespective of the changes in the operating environment.

    Addressing shareholders, chairman, Unilever Nigeria Plc, HRM Nnaemeka Achebe, said shareholders might have to sacrifice short-term gains for long-term returns as the conglomerate seeks to strengthen its fundamentals.

    According to him, the performance of the company in 2013, as in the previous years, was indicative of the short-term effects of deliberate investment strategy to achieve a more sustainable future.

    He pointed out that the fundamentals of the company remain strong and ongoing initiatives would lead to more enduring and sustainable corporate performance.

    “As we continue our sustainability journey, it is evident that we will have to sacrifice short-term profitability to build a more enduring business and fully harness the opportunities that the Nigerian market portends.  As we maintain single-minded focus on our consumers and customers, strengthening our core categories, driving cost and complexity reduction with vigour, building people capability and a fit organisation, and leveraging our Unilever Sustainable Living Plan for growth, we are confident that all these deliberate thrusts can only translate into evident value addition in the longer term for all stakeholders,” Achebe stated.

    Citing the improvement in sales in 2013, Achebe noted that Unilever Nigeria is emerging as a sturdier consumer-centric company, which is better fit to compete for consumers of the future.

    He added that the company was committed to driving the implementation of initiatives that would enhance flow of communication with shareholders and almost immediate rendition of returns urging all shareholders to support the electronic dividend and electronic bonus payment systems.

    According to him, automation of dividend payment directly into shareholders’ accounts would reduce the incidence of unclaimed dividend and share certificates.

    Achebe however noted the need for government to address macroeconomic challenges pointing out that the operating environment has remained tough.

    According to him, Nigeria has experienced further decline in the ease of doing business index while power generation cost rose to astronomical heights, affecting not only the cost of production but also putting increased pressure on the disposable income of consumers.

  • Bankers parley with NSE over market growth

    Bankers, under the auspices of the Chartered Institute of Bankers of Nigeria (CIBN), have given their commitments to work with the Nigerian Stock Exchange (NSE) in strengthening best practices in the Nigerian financial markets.

    Banks represent more than 20 per cent of the market capitalisation of the NSE and they are the most active sector driving transactions at the stock market.

    President, Chartered Institute of Bankers of Nigeria (CIBN), Dr. Segun Aina, yesterday during an official visit to the management of the NSE in Lagos, said the banking sector is closely linked with the stock market, thus the need for the bankers and the NSE to work together to provide proactive measures that would stimulate corporate governance and forestall malpractices.

    According to him, the partnership would help to further deepen the relationship between the NSE, CIBN and the banking industry with the common objective of developing the economy of Nigeria and ensuring capital market growth.

    He noted that the economic crisis and capital market recession witnessed in the recent past would not have happened if proactive steps were taken before then.

    He pointed out that the CIBN has been making efforts to strengthen regulatory framework noting that it recently launched a new code of conduct for the banking industry which strengthens the requirement for the ethical standard.

    He outlined that the objective of the code was to instill discipline in the banking profession noting that the provisions in the code govern the behaviours of both individual and corporate bodies in the banking industry.

    According to him, the code applies to all strata and cadres of employee in the industry, including executive directors, managers, officers and supervisors, whether full-time or part-time while it alos enunciates the guidelines on the handling of reported cases, petitions and complaints.

    “Crisis will always come but we have seen countries that were not affected by the last global financial crisis. We will come out with rule, regulation and requirement that will prepare the country for any upcoming global crisis,” Aina said.

    He cautioned bankers against involving in fraudulent practices warning that any member that engaged in malpractices would be made to face disciplinary procedures.