Bangladesh Securities and Exchange Commission (BSEC) has undertaken a step so that sponsor directors of a listed company are obliged to buy-back shares if their company pose a situation of loss to small investors.
Buy-back share by sponsor directors of errant companies is a long standing demand by small investors as many ghost companies manipulated Tk hundreds of crores from small investors in the name of listing.
“The present company law has a section which protect buy-back company share by company directors. The commission discussed the issue in a recent meeting and requested the Financial Institution Division to write Ministry of Law for bringing amendment in this section,” a high official of the BSEC told Business Mirror preferring anonymity.
The FID already placed the file for approval, the official added.
The BSEC Chairman in a recent meeting with small investors said capital market is currently driven mostly by the role played small investors. “Maybe that’s why we have to pay more attention to them. The participation of institutional investors is low here. We are working extensively on financial literacy to give general investors an idea about the stock market. You will see a huge change within next two years. But before that, we have to make sure that ordinary investors are not deceived in any way,” The BSEC Chairman Professor Shibli Rubayat Ul Islam said.
Professor Islam said good governance is very important to us at the moment. “We have been working on this issue from the beginning. I have made several difficult decisions to force entrepreneurs so that they hold a minimum percentage of share,” he said.
Directors of many listed companies do not comply with the obligation or instructions to hold at least 2% share of their own company. Failure to hold the minimum number of shares will result in legal action, Professor Shibli Rubayat Ul Islam said.
Explaining his plan about bringing those industries into capital market who have been losing for coronavirus pandemic Shibli Rubayat Ul Islam said affected industries, such as tourism, hospitality, real estate and textile sector will get help to draw money in form of bond from capital market.
“If the industrialists bring short term, long term, medium term bonds to us from different sectors, we want to help them with their capital by making a very quick decision, he added.
He called people to invest further saying that “Now this is the right time to invest in Bangladesh’s stock market in the long run. All of this must be explained to foreign investors as well,”
