Bourses asked to provide info about directors’ shareholding in other firms

The Bangladesh Securities and Exchange Commission has asked the country’s stock exchanges to provide a list of the ‘Z’ category companies’ directors who have directorship in other entities connected with the capital market.

The BSEC on September 3 sent a letter to the Dhaka Stock Exchange and the Chittagong Stock Exchange in this regard.

BSEC officials said that the commission asked for the list to implement its recent notification about the ‘Z’ category companies.

On September 1, the regulator asked the companies under the ‘Z’ category to restructure their boards within 45 days after being placed in the category.

If the existing directors fail to do so, the directors would be barred to be directors of any other listed companies and intermediaries or any entity which has connection with the stock market, the BSEC decided.

To implement its decision, the regulator requires knowing about their directorship in other entities, BSEC officials said.

The BSEC would appoint an observer and a special auditor to a company to restructure its board if the company has been in the ‘Z’ category, which groups low-profile scrips, for more than two years and fails to restructure its board.

The restructured board would be given four years to revive the company’s business.

In case of failure, the company would face forced delisting.

Moreover, companies which will fail to provide cash dividend, fail to hold annual general meeting and have net operating losses in two consecutive years, and will keep factory shut for more than six months would be sent to the ‘Z’ category, the notification said.

Shares held by sponsor-directors and current directors of companies in the ‘Z’ category cannot be sold and transferred, it said.

The BSEC has recently asked 22 companies under the ‘Z’ category appear for hearing before the commission with specific business plan to improve their status. Report Newage