Identifying and Prioritizing the Primary Reasons for Companies Being Delisted from the Tehran Stock Exchange Using the ISM-ANP Hybrid Method

Subject Areas : Ethics and accounting

Mehrdad Rezaei Fard ¹ , Masoumeh Jafari ^{2 *} , Mahdi Homayounfar ³

1 - Master's Degree, Business Management, Electronic Branch, Islamic Azad University, Tehran, Iran.
2 - Department of Financial Management, Faculty of Humanities, Eastern Branch, Islamic Azad University, Tehran, Iran
3 - Department of Industrial Management, Rasht Branch, Islamic Azad University, Rasht, Iran

Received: 2024-07-02 Accepted : 2024-09-11 Published : 2024-09-26

Keywords: Capital Market, Company Admission, ISM-ANP Hybrid Method, Accumulated Losses.,

Abstract :

1. INTRODUCTION

One of the key challenges in any capital market is ensuring transparency, accountability, and regulatory compliance to protect investors and maintain market efficiency. In Iran’s capital market, companies listed on the Tehran Stock Exchange (TSE) must meet a range of financial, legal, and structural requirements to remain listed. However, a significant number of companies have been delisted (or had their acceptance canceled) from the TSE due to failing to meet these standards.

The delisting of companies not only undermines investor confidence but also disrupts the financial ecosystem by reducing market liquidity and access to investment opportunities. Despite the importance of this issue, there has been limited systematic research into identifying and prioritizing the key reasons for delisting companies from the TSE. This study fills that gap by using a hybrid qualitative-quantitative approach and advanced decision-making models to determine the most critical factors leading to delisting and provide actionable insights for stakeholders.

The main objective of this research is to identify and rank the primary reasons for canceling company acceptance from the TSE using the Integrated Interpretive Structural Modeling (ISM) and Analytic Network Process (ANP) methods. These findings can assist regulators, financial managers, investors, and policymakers in taking preventative measures to reduce the risk of delisting.

 

2. MATERIALS AND METHODS

Research Design

The study adopts a combined (qualitative–quantitative) methodology with an applied and descriptive-survey approach.

Data Collection

• Qualitative Phase: Semi-structured interviews were conducted with 12 experts in Iran's capital market using purposive sampling until theoretical saturation was reached. These experts included financial auditors, exchange officials, and experienced analysts.
• Quantitative Phase: The findings from the qualitative phase were translated into a researcher-designed questionnaire distributed among 150 managers and experts in the Tehran Stock Exchange. Statistical analysis (one-sample t-test) was then used to finalize the most significant delisting factors.

Population and Sample

• A total of 97 companies delisted from the TSE between 2003 and 2019 formed the empirical basis for the study.
• ISM and ANP model-based questionnaires were completed by 10 selected experts based on specific eligibility criteria (at least 10 years of experience, positions such as financial manager or auditor, etc.).

Analytical Techniques

• Content analysis was used in the qualitative phase to extract the initial list of causes.
• One-sample t-tests were applied to assess the significance of each factor in the quantitative phase.
• ISM (Interpretive Structural Modeling) was used to model relationships among factors and determine hierarchical levels.
• ANP (Analytic Network Process) was applied to weight and prioritize the final factors.
• Software used: SPSS 24, MATLAB, Super Decisions.

 

3. RESULTS AND DISCUSSION

Identification and Screening of Delisting Factors

Through qualitative analysis and expert interviews, 10 primary causes of company delisting were initially identified:

1. Accumulated losses and inclusion under Article 141 of Iran’s Commercial Code
2. Low capital and low trading volume
3. Persistent loss-making operations
4. Failure to meet minimum equity-to-assets ratio
5. Auditor’s disclaimer or adverse opinion
6. Low free-floating shares
7. Failure to submit audited interim and annual financial reports
8. Failure to forecast earnings per share
9. Failure to disclose accurate and timely information
10. Failure to comply with listing regulations and criteria

After applying the one-sample t-test, three factors were found statistically insignificant and removed:

• Low free-floating shares
• Failure to forecast earnings per share
• Failure to provide timely and accurate information

The remaining 7 key factors were used for ISM and ANP analysis.

ISM Analysis

Interpretive Structural Modeling revealed the hierarchical structure of these factors:

• Top-level factors (independent):
• X3: Persistent loss-making operations
• Middle-level (linking):
• X1, X2, X4, X5, X7
• Bottom-level (dependent):
• X6: Failure to submit audited reports

ISM analysis provided a multi-level model showing how some factors serve as root causes and others as results or consequences.

MICMAC Analysis

The MICMAC matrix (Cross-Impact Matrix Multiplication Applied to Classification) was used to classify factors based on their driving power and dependence:

• Driving Factors: Accumulated losses (X1), low capital/trade volume (X2), non-compliance with equity ratios (X4), poor audit opinions (X5), and regulation violations (X7) – All these factors had both high influence and high dependence.
• Independent Factor: Persistent loss-making (X3) – High driving power, low dependence.
• Dependent Factor: Lack of audited reporting (X6) – Low driving power, high dependence.

This classification helps understand which factors to target first in mitigation strategies.

ANP Analysis

The Analytic Network Process was employed to derive relative weights of the final 7 factors. The pairwise comparisons and subsequent supermatrix calculations produced the following priority ranking:

Rank	Factor	Code	Final Weight
1	Accumulated losses and Article 141	X1	0.181
2	Auditor’s disclaimer or adverse opinion	X5	0.124
3	Failure to meet equity-to-assets ratio	X4	0.111
4	Non-compliance with listing rules and regulations	X7	0.096
5	Failure to provide audited financial reports	X6	0.081
6	Persistent operational losses	X3	0.073
7	Low capital and low trading volume	X2	0.064

 

 

These weights reflect the relative impact of each factor in contributing to delisting decisions.

Interpretation

• Accumulated losses represent the most critical factor. Companies whose losses exceed 50% of their capital (triggering Article 141) are deemed financially unsound and at high risk of delisting.
• Audit-related issues (e.g., adverse or disclaimer opinions) undermine trust in financial reporting, triggering regulatory action.
• Compliance failures, including regulatory violations and reporting delays, significantly contribute to the risk of delisting.
• The ISM hierarchy further confirmed that operational losses act as a root cause, feeding into poor financial indicators and regulatory non-compliance.
• These insights reinforce the need for early intervention and improved governance.

 

CONCLUSION

This research aimed to identify and prioritize the main causes of delisting companies from the Tehran Stock Exchange using a structured, data-driven approach combining ISM and ANP methods.

Major Findings

• Seven critical factors were identified, with accumulated losses under Article 141 ranked as the most impactful.
• Audit outcomes and financial reporting deficiencies also play key roles in the delisting process.
• ISM analysis highlighted persistent loss-making as a root cause and audited report submission as a dependent variable.
• ANP analysis confirmed the relative importance of each factor based on expert evaluations.

Practical Implications

• Regulatory bodies should monitor early warning signs such as recurring losses, non-compliance with equity thresholds, and poor audit results.
• Listed companies must focus on transparency, timely reporting, and financial sustainability to avoid delisting.
• Investors can use these findings to assess the risk profile of companies and make informed decisions.
• Auditors and financial managers should strengthen internal controls to improve audit quality and reporting practices.

Contributions to Knowledge

• The study presents a localized and structured model for assessing delisting risks in Iran’s capital market.
• It fills a significant research gap in identifying interconnected causes of delisting through ISM and ANP.
• The combined methodology is transferable to other capital markets with similar regulatory structures.

Recommendations for Future Research

• Application of fuzzy logic to capture uncertainty in expert opinions.
• Longitudinal studies to assess post-delisting outcomes and company recovery patterns.
• Comparative analysis with international capital markets to identify commonalities and differences.

 

References:

آذر، عادل؛ خسروانی، فرزانه؛ جلالی، رضا (1392). تحقیق در عملیات نرم (رویکردهای ساختاردهی مسأله). تهران: انتشارات سازمان مدیریت صنعتی.
ابراهیمی، محمدحسن؛ سلیمی، محمدجواد؛ بولو، قاسم؛ عین‌افشار، حامد (1402). ارائه مدلی جهت شناسایی عوامل اثرگذار بر چسبندگی هزینه‌ها با استفاده از فرآیند تحلیل شبکه‌ای (ANP) و دیمتل. بورس اوراق بهادار، 16(61)، ص228-203.
ابزری، مهدی؛ صمدی، سعید؛ تیموری، هادی (1387). بررسی عوامل موثر بر ریسک و بازده سرمایه‌گذاری در محصول مالی. روند، شماره 55، ص152-123.
اسعدی، عبدالرضا (1398). تشکیل پورتفوی بهینه براساس نسبت‌های مالی در صنایع بورس اوراق بهادار تهران با استفاده از فرآیند تحلیل شبکه و روش دیمتل. تصمیم‌گیری و تحقیق در عملیات، 4(2)، ص183-196.
اسماعیلی‌گیوی، حمیدرضا (1385). مقایسه کارایی بیمه اسلامی (تکافل) و بیمه متعارف با استفاده از فرآیند تحلیل سلسله مراتبی. پایان‌نامه کارشناسی ارشد، رشته معارف اسلامی و مدیریت مالی. دانشگاه امام صادق(ع).
اعتمادی، حسین؛ دهقانی، طوبی (1393). طراحی مدل شبکه‌ای عوامل موثر بر صرف کنترل بلوک‌های کنترلی سهام. پژوهش‌های حسابداری مالی و حسابرسی، 7(25)، ص14-1.
اکبری، سپیده؛ حاجی‌ها، زهره (1395). رابطه ریسک ورشکستگی مالی و اظهارنظر حسابرس در مورد ابهام در تداوم فعالیت. در: تهران: ششمین کنفرانس ملی و چهارمین کنفرانس بین‌المللی حسابداری و مدیریت.
پاکدامن، رضا (1387). قوانین و مقررات بورس و اوراق بهادار. تهران: مرکز آموزش و تحقیقات صنعتی ایران.
دهقان نیری، محمود؛ شاپوری، شاداب (1398). ارائه مدل توسعه پایدار صنعت فولاد با رویکرد ترکیبی ISM-ANP. پژوهش‌های مدیریت منابع سازمانی، 9(1)، ص93-114.
رضایی‌فرد، مهرداد؛ جعفری، معصومه؛ همایونفر، مهدی (1402). شناسایی، ارزیابی و اولویت‌بندی عمده‌ترین دلایل خروج شرکت‌ها از بازار اول و دوم بورس اوراق بهادار تهران با استفاده از روش ترکیبی ISM-ANP. پایان‌نامه کارشناسی ارشد. دانشگاه آزاد اسلامی واحد الكترونیكی تهران.
شادلوی، سعید؛ وکیلیان، مهدی (1398). بررسی رابطه محتوای گزارش حسابرسی و خروج شرکت از بورس اوراق بهادار. پایان‌نامه کارشناسی ارشد. دانشکده ادبیات و علوم انسانی، دانشگاه بین‌المللی امام رضا (ع).
شکرایی‌فرد، پانیذ؛ رهنمای‌رودپشتی؛ فریدون، خان‌محمدی، محمدحامد (1402). شناسایی مولفه‌های موثر بر تکامل حسابداری مدیریت با استفاده از روش ANP فازی در بین شرکت‌های عضو سازمان بورس و اوراق بهادار. دانش حسابداری و حسابرسی مدیریت، 12(46)، ص410-391.
غمیلوی، سید علیرضا؛ محمودی، محمد؛ نبوی، علی (1395). حجم معاملات، یازده سهام و انتشار صورت‌های مالی حسابرسی شده. پایان‌نامه کارشناسی ارشد حسابرسی. موسسه آموزش عالی فروردین.
فدایی‌نژاد، محمداسماعیل؛ مظفری‌وانانی، حمید؛ نیچلی، مسلم؛ مددی آورگانی، رشید (1394). به‌کارگیری ‌روش‌های‌ تصمیم‌گیری‌ چند‌معیاره‌ جهت ‌تعیین‌ ارزش ‌نسبی ‌شرکت‌های ‌مواد ‌غذایی ‌و ‌آشامیدنی ‌بورس ‌اوراق تهران. چشم‌انداز مدیریت مالی، شماره 10، ص145-129.‌
محمدی، عطاءالله؛ امجدیان، صابر؛ پرویزی، بهزاد (1401). ارزیابی عملکرد مالی با استفاده از روش‌های ISM و BWM در شرکت‌های پذیرفته شده در بورس اوراق بهادار تهران. پژوهش‌های تجربی حسابداری، 12(2)، ص111-130.
مصلح شیرازی، علی‌نقی؛ پشوتنی‌زاده، هومن (1397). اولویت‌بندی صنایع پذیرفته شده در بورس اوراق بهادار تهران طی دوره قبل و بعد از آزادسازی مالی با استفاده از الگوی فرآیند تحلیل شبکه‌ای. بررسی‌های بازرگانی، شماره 92-93، ص91-79.
ملکیان، اسفندیار؛ کامیابی، یحیی؛ قلی‌پور، شهربانو (1392). بررسی رابطه بین مدیریت سرمایه در گردش با بازده حقوق صاحبان سهام بازده دارایی نسبت جاری و برخی از شاخص‌های دیگر شرکت‌های پذیرفته شده در بورس اوراق بهادار تهران. در: مشهد: یازدهمین همایش ملی حسابداری ایران.
ودیعی، محمدحسین؛ سمائی‌رهنی، سعید؛ چوپانی، محمدرسول (1396). ارزیابی و مقایسه گزارش حسابرس شرکت‌های فعال و لغو پذیرش شده در بورس اوراق بهادار تهران. دانش حسابرسی، 17(66)، ص150-131.
Alamoudi, M.H. & Bafail, O.A. (2022). BWM—RAPS approach for evaluating and ranking banking sector companies based on their financial indicators in the Saudi stock market. Journal of Risk and Financial Management, 15(10), p. 467.
Beasley, M., Branson, B. & Pagach, D. (2015). An analysis of the maturity and strategic impact of investments in ERM. Journal of Accounting and Public Policy, 34(3), p. 219-243.
Digalwar, A., Raut, R.D., Yadav, V.S., Narkhede, B., Gardas, B.B. & Gotmare, A. (2020). Evaluation of critical constructs for measurement of sustainable supply chain practices in lean‐agile firms of Indian origin: A hybrid ISM‐ANP approach. Business Strategy and the Environment, 29(3),
p.1575-1596.
Dinçer, H., Hacıoğlu, Ü. & Yüksel, S. (2017). A strategic approach to global financial crisis in banking sector: A critical appraisal of banking strategies using fuzzy ANP and fuzzy topsis methods. International Journal of Sustainable Economies Management (IJSEM), 6(1), p.1-21.
Jana, S., Giri, B.C., Sarkar, A., Jana, C., Stević, Ž. & Radovanović, M. (2024). Application of Fuzzy AHP in Priority Based Selection of Financial Indices: A Perspective for Investors. ECONOMICS-Innovative and Economics Research Journal, 12(1), p.1-27.
Lam, W.H., Lam, W.S., Liew, K.F. & Lee, P.F. (2023). Decision analysis on the financial performance of companies using integrated entropy-fuzzy topsis model. Mathematics, 11(2),
p. 397.
Mohammaddoost, A., Falah Shams Dialestani, M.F., Eshaghi Gordji, M. & Ebadian, A. (2021). Evaluating the Factors Affecting on Credit Ratings of Accepted Corporates in Tehran Securities Exchange by Using Factor Analysis and AHP. Advances in Mathematical Finance and Applications, 6(1), p.167-183.
Nenu, E.A., Vintilă, G. & Gherghina, Ş.C. (2018). The impact of capital structure on risk and firm performance: Empirical evidence for the Bucharest Stock Exchange listed companies. International Journal of Financial Studies, 6(2), p. 41.
Owusu, E.L. (2016). Stock market and sustainable economic growth in Nigeria. Economies, 4(4),
p. 25.
Tan, S.L. (2022). Bank, Stock Market Efficiency and Economic Growth: Panel Data Evidence from ASEAN-5, Asia-5 and OECD-7 Countries. Singapore Economic Review Conference (SERC). School of Economics, Singapore Management University.
Tenkasi, R.R.V. & Kamel, Y. (2016). To bankruptcy and back: Turnaround strategies for firm emergence, long-term survival, and speed. In: Research in organizational change and development (Vol. 24, pp. 221-259). Emerald Group Publishing Limited.
Yadav, S.K. & Kapoor, R. (2018). Financial performance ranking of automotive companies in India using TOPSIS method. International Journal of Business Excellence, 16(2), p.149-161.
Yeong Kima, M.H. & Shiguang, M. (2016). Survival prediction of distressed firms. Journal of the Asia Pacific Economy, No. 21, p. 418-443.