The Bangladesh Securities and Exchange Commission on Tuesday decided to take legal action against the listed companies’ directors who do not hold at least 2 per cent shares of their companies breaching securities rules.
The commission also decided to issue an order to the companies to ensure that their sponsor-directors hold minimum 30 per cent of total shares as per the rules.
The market regulator took the decision in a commission meeting presided over by its chairman M Khairul Hossain, said a BSEC press release.
The BSEC in a recent investigation, followed by a High Court, has found that 219 directors of 78 listed companies don’t hold the required minimum 2 per cent shares of their companies.
Earlier in October, last year, the High Court asked the BSEC to explain within four weeks why it was not removing from the boards the company directors who were not holding the required shares of the companies.
The HC move came following a writ petition filed by an investor.
A BSEC investigation team presented its report on directors’ shareholding to the commission on January 30 for a decision.
Officials said as per its directive on taking legal action, the commission could vacate directorship of any errant from the board if he or she continues with violating the rules.
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.
Furthermore, ‘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.
The BSEC also decided to issue an order about the joint share holding of 30 per cent by the directors as it found that many of companies were flouting the rules.
According to a DSE December review, sponsors/ directors of 42 companies have not jointly held the required shares.
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