The Bangladesh Securities and Exchange Commission has taken a step to punish 219 individual directors of 78 listed companies at the two stock exchanges due to their non-compliance with the mandatory minimum shareholding rules.
The BSEC took the step after it found that the directors were not holding 2 per cent of the shares in their respective companies.
The commission may provide them a timeframe to comply with its directive regarding 2 per cent minimum shareholding requirement, BSEC officials said.
The commission may vacate their directorship from the boards of the companies if they continue violating the rules, they said.
According to the BSEC notification issued on November 22, 2011, each director other than independent director of any listed company must hold minimum 2 per cent shares of the paid up capital, otherwise there will be a casual vacancy of director.
‘If the sponsors/promoters and directors of any listed company fail to hold the aforesaid amount of shares, the respective company would not be able to declare rights share and raise capital through repeat public offer,’ it said.
Earlier, the High Court asked the BSEC to explain why it was not removing from the boards the company directors who were not holding the required percentage of shares of the companies’ paid up capitals. The HC move came following a writ petition filed by an investor.
The BSEC found that because of the non-compliance many companies failed to follow the mandatory holding of 30 per cent of the company shares by directors jointly.
According to the DSE December review, sponsors/ directors of 42 companies are not jointly holding the 30 per cent mandatory shares of the companies’ paid up capitals.
The matter will be placed before the commission’s meeting for the final decision, said BSEC officials.
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