The Bangladesh Securities and Exchange Commission on Sunday cancelled the directorship of 17 directors of nine listed companies for not holding a minimum of 2 per cent shares in their respective companies.
The BSEC issued an order on the day, removing the directors from their positions as they failed to comply with the minimum shareholding rules within the given time, BSEC officials said.
The order was issued with immediate effect, they said.
The regulator in separate letters issued on July 2 asked 61 directors of 22 listed companies to ensure holding of minimum of 2 per cent shares in their respective firms within 45 days to keep their directorship in the entities.
Of the 61 directors, 25 directors complied with the 2 per cent shareholding requirement and 19 others resigned, BSEC officials said.
However, the regulator found that 17 directors of nine listed companies were holding less than minimum 2 per cent share of paid up capital of the company and they were also
continuing to hold position of the directorship of the company ignoring the commission’s notification on minimum shareholding rules, according to the BSEC order issued on Sunday.
‘Therefore, the BSEC declares casual vacancy or stand vacant of the positions and directs the board of the directors to fill up the vacancies from any shareholders having 2 per cent or more shares of the paid up capital within 30 working days,’ it said.
In a notification issued on November 22, 2011 that was amended on May 21 last year, the BSEC made it mandatory for each sponsor-director to hold a minimum of 2 per cent shares of the company’s paid-up capital.
According to the rules, if any director fails to comply with the 2-per cent shareholding rules, his/her position would be automatically vacated.
Despite repeated warnings from the regulator, many directors continued occupying their positions without complying with the rules.
Under the circumstances, the commission made the decision to bring governance on the market.
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