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As per a stock market regulator directive, every director other than an independent director of a listed company will hold a minimum of 2% shares of the paid-up capital
A total of six directors of four listed banks do not hold a minimum 2% share in their own companies.
As per a stock market regulator directive, every director other than an independent director of a listed company will hold a minimum of 2% shares of the paid-up capital. Otherwise, there shall be a casual vacancy of director. Any individual holding 5% or more shares will be entitled to be a director in their place.
Meanwhile, as per rules all sponsors or promoters and directors of a listed company shall all time jointly hold minimum 30% shares of the paid-up capital of the company.
The sponsors and directors of the companies in question are holding their positions in violation of a 2011 Bangladesh Securities and Exchange Commission (BSEC) directive.
Recently, a meeting of the BSEC with different stakeholders, including merchant banks and Dhaka Stock Exchange, took a number of critical decisions to revive the ailing stock market.
Till date, a total of 179 directors of 59 listed companies do not meet this requirement and are not eligible to be directors. Among them are six directors of four listed banks who do not hold a minimum 2% share, as per Dhaka Stock Exchange data.
They are Md Fakhrul Islam, director of Dutch-Bangla Bank Limited. He holds 10,000 shares or 0.01% share of his company.
Md Abdul Mannan, vice-chairman of the Board of Directors of Export Import Bank of Bangladesh Limited (Exim Bank), holds only 0.55% share of this Bank. He is a Member of Parliament, elected for the second consecutive term.
When approached by Dhaka Tribune, Exim Bank Vice-Chairman Abdul Mannan admitted: “According to the directive of the BSEC, I do not have 2% shares.”
He, however, claimed that he held the post with the approval of the court.
Sirat Monira, director of Southeast Bank from “B” Group i.e. public shareholders, holds 00.01% share of the bank. She is a member of Dhaka Ladies Club.
Besides, three directors of Uttara Bank Limited also do not meet the minimum share requirement. They are Badrunnesa Sharmin Islam, Faruque Alamgir and Col Engr MS Kamal (Retd). They respectively hold 5,552,748 shares or 1.39%, 3, 339 shares or 0.00% and 40,074 or 0.00%.
Badrunnesa Sharmin Islam was nominated by Wealthmax Asset Management Ltd and MS Kamal was nominated by Blue Sky Asset Management Ltd.
Former BSEC Chairman and economist AB Mirza Azizul Islam says: “Companies violating rules are not practicing corporate governance. So BSEC should take measures to ensure that directors of all listed companies individually hold minimum 2% share.”
“If listed companies do not follow the rule, small investors may lose their interest in the companies,” he warns.
BSEC Executive Director Md Saifur Rahman has said that the commission already took a number of measures against the sponsor-directors of a number of companies who violated the commission’s order regarding minimum shareholding by the sponsor-directors.
The BSEC came up with the order in the aftermath of the stock market crash in 2010. The move was aimed to make the directors responsible and loyal to small investors, as it was seen that many directors sold off their shares right before the debacle.
(DT)
