Annuls DSE decision on Nikunja building allocation to members
The Bangladesh Securities and Exchange Commission has approved the demutualisation schemes of the Dhaka and Chittagong stock exchanges, revoking DSE’s decision on allocation of spaces of its Nikunja Bhaban to member-brokers. After holding two separate meetings with the Dhaka Stock Exchange and the Chittagong Stock Exchange, the BSEC on Thursday sent the finalised schemes to the bourses.
The regulator on Tuesday approved the demutualisation schemes at a regular commission meeting presided over by its chairman M Khairul Hossian.
The commission also decided to issue directive in this regard to the bourses within September 29 after hearing the DSE and the CSE in September 24-25.
However, the commission in a directive asked the DSE to issue a declaration that the Nikunja Bhaban, a 13-storied building at Nikunja in the city, is a property of the bourse, BSEC sources said.
The BSEC also asked the bourse not to issue any tenancy allocation of its floor spaces among the member-brokers before the end of its demutualisation process, they said.
Earlier on August 27, the BSEC asked the DSE to give details about its fixed assets, including the Nikunja building. The DSE later replied that it had allocated floor spaces among the members as tenancy allocation.
The DSE in its scheme showed Tk 4,200 crore as its asset value and Tk 1,803 crore as paid-up capital while the CSE showed Tk 634 crore as its paid-up capital.
The Demutualisation Act- 2013 was passed in the parliament on April 29 in a bid to separate the bourses’ management from its ownership. The bourses submitted their respective demutualisation schemes to the BSEC on July 29.
In the finalised schemes, the BSEC set the board size of the bourses at 13 members. The bourses had proposed 19- member board.
Of the 13 directors, four will come from member-brokers, seven from independent criterion, one from strategic investors and the rest one chief executive officer.
According to the schemes, the bourses will submit to the BSEC a list of 14 persons for independent directorship, and then the regulator will pick seven from the list.
If the strategic investors are not found, the post of directorship from the investors will be filled with another independent director. The strategic partner of the DSE can be any local and foreign company which will buy into some of the stakes of the bourse.
Maximum two strategic investors could be included in the board which will reduce the number of member-brokers representative in the board to three, the schemes said.
The tenure of the independent directors of the Dhaka and Chittagong stock exchanges will be three years. The bourses in their respective schemes had proposed one-year term for the independent directors.
No sub-committees of the bourses can be formed by including member-brokers of the bourse due to their conflict of interests. The bourse would be able to form four to six sub-committees on different purposes.
The bourses have to dissolve the present boards after getting registered with the Registrar of Joint Stock Companies and Firms within the first week of November and the bourses have to form interim boards as per the finalised schemes. The bourses then will form new boards in February next year after holding extraordinary general meetings.
The member-brokers of the DSE and the CSE have to transfer 60 per cent of their allocated shares to a block account, while the rest 40 per cent will belong to the member-brokers.
-With New Age input
