Bangladesh Securities and Exchange Commission on Tuesday directed the chief executive officers of the Dhaka and Chittagong stock exchanges to amend their respective extraordinary general meeting’s notice that named 24 members on their ‘interim board’.
The proposed board could be restructured if the commission deems necessary, said the regulator as quoted by BSEC sources.
The capital market regulator made the move as it had recently sought clarification from the finance ministry as the Demutualisation Act 2013 did not contain clear directions regarding formation of the ‘interim board’ that would come into being after the bourse’s registration with the Registrar of Joint Stock Companies as profit-oriented organisations and would be in office till the next elections of the bourses.
The DSE and the CSE have already scheduled their EGMs for October 29 and October 25 respectively to adopt demutualisation schemes, memorandum of associations and list of directors for the first board and increase authorised capital.
The bourses recently decided to keep the present board members on the interim board, even after the BSEC scrapped their proposal of a 24-strong ‘interim board’ after demutualisation.
The sub-section ‘ka’ of section 8 of the Demutualisation Act asked the bourses to adopt a list of board members for the first board or directors in an annual general meeting within 30 days of the approval of the scheme while the sub-section ‘ka’ of section 11 of the act said to hold the first meeting of the board within 90 days of demutualisation through an election.
The stock exchange will be demutualised after getting registered with the RJSC, but the act did not mention what would be the pattern of the board after registration.
Due to the haziness in the Demutualisation Act 2013, the BSEC had recently requested the finance ministry to clarify how the ‘interim board’ would be formed.
The bourses, however, issued notices of EGMs before the BSEC got any clarification from the ministry.
‘I think there is no logic behind the DSE’s assumption that the present board members of the bourse would sit in the first board after demutualisation as the commission had not approved their proposal,’ BSEC commissioner Helal Uddin Nizami told New Age.
The BSEC earlier on September 26 approved the demutualisation schemes of the Dhaka and Chittagong stock exchange keeping seven posts for the independent directors, five for member-brokers (who will turn into shareholders after the demutualisation), including the strategic partner, and one for the chief executive officer.
‘There was nothing mentioned about the interim board — neither in the scheme nor in the act. As far as we understand, the stock exchange will be demutualised from the date of registration with the RJSC and we have 90 days to form the 13-member board after the demutualisation,’ DSE president Ahasanul Islam had told New Age earlier.
-With New Age input
