Private sector cable manufacturer BRB Cables Ltd has secured directorship posts in the board of its competitor in the market, state-run Eastern Cables Limited, after a longstanding dispute over the issue.
BRB Cables chairman Mujibur Rahman holding 13.59 lakh or 5.66 per cent shares, directors Shamsur Rahman 4.88 lakh or 2.04 per cent shares and Emadadul Haque 12.24 lakh or 5.10 per cent shares and executive director Mofizur Rahman 11.96 lakh or 4.96 per cent shares in ECL became directors of ECL recently.
They became the ECL directors after the High Court recently directed the company’s directors who do not hold minimum 2 per cent shares as per securities rules to vacate their posts and the shareholders who hold more than 2 per cent shares of ECL to fill the vacancies, BRB officials said.
Four shareholding directors of ECL did not have minimum 2 per cent shares as per securities rules while the four shareholders linked with BRB Cables hold most of the public shares of ECL.
Earlier, the industries ministry opposed the BRB’s move to secure directorship posts in the ECL board and requested the market regulator, Bangladesh Securities and Exchange Commission, to halt the move.
The company bought around 70-75 lakh shares of ECL in 2017 from general investors through the stock exchange.
Industries ministry officials said BRB, being a competitor, bought most of the offloaded shares of ECL ‘unethically’.
The number of total shares of ECL is 2.4 crore, of which the government holds 51 per cent of the shares while it offloaded the rest 49 per cent on the capital market.
The ministry on December 28, 2017 asked BSEC to take necessary steps so that officials of BRB Cables could not hold any directorship post in ECL.
BSEC, however, had directed ECL to reform its board by appointing directors from the shareholders holding 2 per cent shares of the company individually as a number of its directors did not hold mandatory minimum 2 per cent shares of the company individually.
BRB Cables chairman Mozibar Rahman recently told New Age that BRB Cables would assist ECL to improve business environment through its vast experience.
He also said that BRB had no intention to grip ECL and take benefits from the company.
ECL removed four directors — Nasir Uddin Chowdhury, Mahbubul Anam, Shahudul Huque Bulbul and Afsar Uz Zaman — as the directors did not hold mandatory minimum shareholding of the companies’ paid-up capital.
According to the BSEC directive, each director other than independent director (s) of any listed company must hold minimum 2 per cent shares of the paid-up capital of his/her company, otherwise there will be a casual vacancy of director.
ECL postponed its AGM supposed to be held in January, 2018 for the year ended on June 30, 2017. The AGM now will hold on January 26 this year.
In ECL, there are nine directorship posts. Five are appointed by the government and the rest four are shareholding directors.
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