The regulator Bangladesh Securities and Exchange Commission (BSEC) has declared vacant the posts of 16 directors of nine companies listed on the stock exchange for failing to hold a minimum of 2% shares. In addition, the commission has directed to fill the existing vacancies in the board of directors of these companies through any shareholders who have 2% or more shares within the next 30 working days. An order in this regard has been issued by BSEC yesterday.
The order, signed by BSEC chairman Prof Shibli Rubaiyatul Islam, said the commission’s directive required all directors other than the individual directors of listed companies to hold a minimum of 2 per cent shares. If the managers do not have a minimum share, their position will become vacant. And in a vacant position, the board of directors has to comply with the law with those who have 2 percent or more of the existing shareholders.
In the meantime, a letter was sent on July 2 this year asking the directors of the companies who did not have at least 2 per cent shares within 45 days to comply with the commission’s directive.
According to the Dhaka Stock Exchange and Chittagong Stock Exchange, nine directors of nine companies do not have at least 2 per cent shares at present and they are still holding the post in violation of the commission’s directives. As a result, the Commission is declaring the 17 posts of directors vacant as well as instructing the Board of Directors of the concerned companies to fill the vacant posts of the Board within 30 working days of the issuance of this order with any shareholders holding 2% or more shares.
Among the 17 directors of the nine companies who lost their posts by the commission’s order are Sohail Humayun, Director, Bangladesh General Insurance Company Limited (BGIC); Lokman Chowdhury, Director of Intake Limited ATM Habibul Alam, Sadika Mahbub and Anisuzzaman. Meghna Life Insurance directors Sharmin Nasir and Dilruba Sharmin, Mercantile Insurance Limited directors Shafiq Ahmed, Azad Mostafa, Aziz Mohammad Ershad Ullah, Farhana Islam Sonia and Saad Qadir bin Solaiman, Prabhati Insurance Limited directors Habibur Rahman Khan Entrepreneurial Director Mohammad Iqbal and United Airways Limited Director Shahinur Alam.
On July 2 this year, the BSEC issued an ultimatum to 61 directors of 22 listed companies to hold a minimum of 2% shares within 45 days. After receiving the ultimatum of the commission, 25 directors have already held 2% shares. On the other hand, 19 directors have resigned.
It is to be noted that the dispute has been going on since the issuance of the notification on November 22, 2011 regarding the joint holding of minimum 30 per cent and 2 per cent shares of the entrepreneur-directors of the listed companies. Several entrepreneurs-directors have filed writ petitions in the High Court challenging the validity of the notification. However, in the end, the decision of the Appellate Division came in favor of BSEC in the legal battle.
