The Bangladesh Securities and Exchange Commission on Wednesday decided that it would reform boards of the listed companies which will fail to comply with 30 per cent joint shareholding by their directors by November 30.
The BSEC made the decision at a commission meeting presided over by its chairman Shibli Rubayat-Ul-Islam, a BSEC press release said.
To restructure the board of directors of the errant company, the commission approved a draft working plan.
Earlier on July 29, the BSEC gave an ultimatum to 41 listed companies to comply with the 30-per cent shareholding rules within 60 working days.
However, it extended the time limit by 30 more days on October 26 after appeals made by several companies.
The BSEC on November 22, 2011 issued a notification, which was amended in May last year, making it mandatory for sponsor-directors of a listed company to hold jointly at least 30 per cent shares of the company, but is yet to implement the rules fully.
The rules were originally introduced to ensure a significant amount of shares to be held by the sponsor-directors of a listed
company so that the company’s board has interest in improving business of the company.
Of the 41 companies, only few companies complied with the rules, BSEC officials said.
So, the regulator took a tough move regarding the issue, BSEC officials said.
Previously, there were more than 219 directors who had not complied with the individually minimum 2 per cent shareholding rules.
But, the commission has now brought the number down to zero as it removed 17 defaulting directors of nine companies from their posts as punishment, the officials said.
The BSEC at the meeting also allowed Social Islami Bank Limited to float mudaraba perpetual bond worth Tk 500 crore.
As per the BSEC approval, the bank will float unsecured, contingent-convertible, floating rate, mudaraba perpetual bond.
The face value of each unit of the bond will be Tk 10 lakh.
Only corporate bodies, corporate institutions, various funds and other eligible investors will be allowed to subscribe the bonds through private placement.
The purpose of the issue is to strengthen the bank’s capital base and meet its capital requirement under Tier-I.
EBL Investment Limited acts as the trustee for the bond while City Bank Capital Resources Limited and Prime Bank Investment Limited are the mandated lead arrangers for the bond.
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