Directors’ Shareholding
BSEC fines one co, warns 16 others for flouting directive
The Bangladesh Securities and Exchange Commission on Tuesday fined a company and warned 16 others for non-obedience with a BSEC directive which asked sponsor-directors of listed companies to hold 2 per cent shares individually and 30 per cent jointly.
The capital market regulator made the decision in a regular commission meeting presided over by its chairman M Khairul Hossain where other commission members attended, a BSEC release said.
Barkatullah Elector Dynamics Ltd was fined with Tk 1 lakh as its sponsor-directors failed to acquire 2 per cent shares individually and 30 per cent shares jointly, it said.
While, the BSEC also decided to issue warning letters to 16 other listed companies as they did not inform the regulator about their sponsor-directors’ shareholding information within six months of the BSEC directive despite holding stipulated amount of shares.
The companies are: Ambee Pharmaceutical, Anlimayarn Deying, CMC-Kamal Textile Mills, Padma Islami Life Insurance, Pragati Life Insurance, Quasem Drycells, Rangpur Dairy & Food Products, Beach Hatchery, Imam Button Industries, Pragati Industries, Standard Ceramic Industries, Global Insurance, Information Services Network, Intech Online, Islami Insurance Bangladesh and Monno Ceramic Industries.
After the stock market crash in 2010-2011, the BSEC on November 22, 2011 imposed the mandatory provision for the sponsor-directors, other than independent ones, up to at least two per cent of their companies’ paid-up capital.
The directive also said that any of the listed companies would not be eligible to issue any rights share for their shareholders without holding the stipulated amount of shares.
The BSEC after issuing the directive under its special power had faced several writ petitions which challenged the legality of the issuance of such directive by the capital market regulator.
In May 2012, the High Court upheld the BSEC directive and asked the sponsor-directors of the companies to follow the directive.
After the HC verdict, the BSEC on September 19, 2012, declared 359 posts of sponsors-directors of 103 listed firms vacant as they failed to hold at least 2 per cent shares in their respective companies in line with the directive.
The capital market regulator then also asked the listed companies to restructure their boards and submit to it certified copies of the newly-formed boards.
-With New Age input
