17 directors are losing their posts due to not holding 2% share

The regulatory body Bangladesh Securities and Exchange Commission (BSEC) has decided to cancel the posts of 17 directors of 10 companies listed on the stock exchange. The commission may issue an order in this regard next Sunday.

This information has been known from the relevant sources.

It is learned that after the new commission took charge, it issued a circular on July 2, 2020 with the obligation to hold 2% shares. The time given is 45 days. This time ended last Sunday. Already many directors have complied with the law. The BSEC has decided to cancel the directorship of those who did not. The BSEC chairman has already signed the order.

In this regard, BSEC chairman Prof Shibli Rubaiyatul Islam told SunBD that the commission is working for the development of the capital market and in the interest of small investors. We want a transparent and accountable capital market. We are ready to do what needs to be done for this. A beautiful and transparent market will be formed with the cooperation and joint efforts of all.

Many listed companies are violating the securities law and are not complying with the law of holding 2% shares individually and 30% shares collectively.

Last Thursday (July 2, 20), the Bangladesh Securities and Exchange Commission (BSEC) issued an ultimatum to 61 directors of 22 companies to hold minimum shares, commission sources said. However, individual managers will be excluded from this instruction.

It may be mentioned that in the context of the catastrophic fall in prices after the share manipulation in 2009-10, on November 22, 2011, the regulator of the capital market, BSEC, imposed a condition on the directors of listed companies to hold minimum shares individually and collectively. The objective was to form an appropriate representative board to ensure accountability and transparency in the management of the company.

Under the directive, the BSEC had imposed an obligation on the company concerned to have at least 2 per cent stake in the company. In addition, the company’s entrepreneurs and directors jointly stipulated a 30 percent stake. Many directors and companies have violated this condition in the last eight years.

In the same year, 14 directors of 4 companies filed a writ petition challenging the directive. In the end, the court rejected the writ petition of the directors and upheld the decision of BSEC.