As per a stock market regulator directive, all sponsors or promoters and directors of a listed company must jointly hold a minimum 30% shares of the paid-up capital of the company at all times
A total of 41 publicly listed companies were yet to comply with the 30% shareholding requirement by their sponsors and directors.
As per a stock market regulator directive, all sponsors or promoters and directors of a listed company must jointly hold a minimum 30% shares of the paid-up capital of the company at all times.
The sponsors and directors of the companies in question are holding their positions in violation of a 2011 Bangladesh Securities and Exchange Commission (BSEC) directive.
The stock market regulator came up with the order in the aftermath of the stock market crash in 2010.
Then, the move was made to make the directors responsible and loyal to small investors, as it was seen that many directors sold off their shares right before the crash.
On July 29 earlier this year, the new commission 44 listed companies to ensure a minimum 30% shares in their own companies within 60 days.
As per information received from the regulator on Monday, 41 of the 44 were yet to comply with the rule.
The companies which complied with the directive are BD Thai Aluminum, Bangladesh General Insurance and Emerald Oil Industries Limited.
The BSEC also decided to direct its enforcement department to take legal action against directors of listed companies who were not individually holding at least 2% share of paid-up capital.
Stock market investors alleged that many sponsors and directors have sold off their shares but still are holding controlling stake of the companies.
They added that if the mandatory 30% shareholding could be enforced, it could help ease the ongoing liquidity crisis in the capital markets through the release of a substantial amount of funds in the stock market.
On top of that, corporate governance would be established in the company, they observed.
BSEC spokesperson Md Rezaul Karim told Dhaka Tribune that the commission already took a number of measures against the sponsor-directors of a number of companies who violated the commission’s order about minimum shareholding by the sponsor-directors.