B Mirror Desk : The directors of Sikder Insurance Company Limited are breaking the law less than a year after the company was listed on the capital market. The directors of the non-life insurance firms are not adhering to the requirement that its entrepreneurs and directors own sixty percent of the company’s total shares.
Furthermore, the listed company’s directors and entrepreneurs violated the Securities Act by selling shares without prior notice. The Dhaka Stock Exchange and associated sources provided this information.
As reported, the Bangladesh Securities and Exchange Commission (BSEC), which regulates the capital market, has mandated that entrepreneurs and directors of publicly listed companies announce their intentions before buying or selling shares. Nevertheless, the entrepreneurs and directors of Sikder Insurance have sold shares without making any prior announcements, thereby violating this regulation. They raised the share price from 20 taka 50 paisa to a peak of 25 taka 40 paisa at different intervals and sold these shares to both institutional and general investors. As a result, general investors have incurred significant losses due to the undisclosed sale of shares at inflated prices. Market observers are labeling this incident as a breach of securities law and a fraudulent act against investors. Currently, entrepreneur directors own 50.40 percent of the company’s total shares.
Reports indicate that there has been a significant shift in the shareholding structure of Sikder Insurance, a general insurance company, over the past month. The shareholding of entrepreneur directors has dropped by 09.60 percent, while the shares held by institutional and general investors have risen. However, there is no available information explaining the decline in shares held by entrepreneur directors across both stock exchanges in the country. Investors are expressing concerns regarding the buying and selling of shares without any prior announcements.
On the evening of Monday (May 26), attempts were made to reach Abdur Razzak, the company secretary of Sikder Insurance Company Limited, via mobile phone multiple times to discuss this issue, but he was unavailable for comment.
According to sources from the DSE, on March 31, 2025, entrepreneur directors held 60 percent of the company’s shares. By April 30, 2025, this figure had fallen to 50.40 percent, indicating a 09.60 percent decrease in the shares held by entrepreneur directors within just one month. Additionally, on March 31, 2025, institutional investors held 2.21 percent of the company’s shares.
The directors of Sikder Insurance, a non-life insurance company, have lost their ownership of 60 percent of the paid-up capital due to the secret sale of their shares.
Capital market analysts indicate that when the shareholding of entrepreneurs and directors in a company diminishes, they tend to neglect the business operations of that company. Consequently, general investors incur losses when purchasing shares of such companies. However, if entrepreneurs and directors acquire or maintain a minimum number of shares, it could generate a significant fund. This would assist in alleviating the current liquidity crisis in the capital market.
It is important to highlight that the IPO (initial public offering) of Sikder Insurance received approval during the 882nd meeting of BSEC. The company was authorized to raise 16 crores from the capital market by issuing 1 crore 6 million shares at a price of 10 taka each. Previously, on April 26, BSEC had denied the company’s IPO application after determining that the company’s Credit Information Bureau (CIB) report was inconclusive. The company’s trading commenced on both stock exchanges on January 24 of last year (2024).
