The development means the companies’ boards are likely to be recast
As many as 28 publicly listed companies’ directors have failed to comply with a mandatory rule of holding a combined minimum stake of 30 per cent in their companies within the deadline given by the securities regulator.
The development means the companies’ boards are likely to be recast by the Bangladesh Securities and Exchange Commission.
All sponsors or promoters and directors of publicly listed companies must jointly hold a minimum of 30 per cent shares of their company at all times, according to a directive of the regulator issued in 2011.
Earlier on July 29, the Bangladesh Securities and Exchange Commission found 44 companies were not meeting the regulatory requirement and gave them 60 days to comply with it.
Only three of the 44 companies acted on the BSEC order.
Then on September 30, the securities regulator gave the 41 companies until November 30 to comply with it.
A mere 13 companies have responded to the call of the regulator; two-thirds of the companies have defied the directive.
Several measures have been taken against the sponsor-directors of the companies for violating the order of the commission on minimum shareholding, BSEC Spokesperson Md Rezaul Karim told Dhaka Tribune.
Some of the companies have applied to the BSEC for more time, he added.
Companies that violate rules are not practising corporate governance and this may drive small-scale investors to lose interest in the companies, said AB Mirza Azizul Islam, a former BSEC chairman.
“The apex regulator should take measures to ensure that directors of all publicly listed companies jointly hold the minimum 30 per cent shareholding,” he added.
The companies that complied with the minimum shareholding directive during the last 60 days are: Baraka Power, Bay Leasing, BD Thai Aluminum, Bangladesh General Insurance, City Bank, Emerald Oil Industries, Maksons Spinning, Meghna Life Insurance, Metro Spinning, Northern Islamic Insurance, Peoples Insurance, Southeast Bank and Standard Ceramic Industries.
Earlier, the commission decided to strip 17 directors of 10 listed companies from their posts for not holding a minimum of 2 per cent shares in their own organisations.
Before, the securities regulator asked 61 directors of 22 listed companies to ensure a minimum 2 per cent shareholding in their own companies within 45 days to continue their directorship.