Bangladesh Securities and Exchange Commission (BSEC) has taken a firm stand in the matter of complying with the rules and regulations by the listed companies in the capital market.
Sources said 61 directors of 22 companies have so far failed to conform to the mandatory rule of holding a minimum two-percent share of their companies’ paid-up capital, but still remained in the post of director.As part of the move, BSEC sent a letter the defaulters.
The letter asked the directors to obey the rules of holding two percent of their companies’ shares within 45 working days to retain the post of directorship.
As per the shareholding data of February 2020, 22 companies have 61 directors, who have less than two-percent share.
These directors will have to buy the deficit shares within 45 working days after receiving the letter from the commission.
On November 22, 2011, BSEC issued a directive, which made it mandatory for each sponsor-director to hold a minimum of two-percent share of a company’s paid-up capital.
The directive was amended on May 21, 2019, imposing more restrictions.According to the rules, if any director fails to comply with the two percent shareholding rules, his/her position will be automatically vacated.
Despite repeated warnings from the regulator, many directors have held their positions without complying with the rules. Of the 22 companies, 14 are insurance companies.
Six directors of Continental Insurance Ltd, six from Purabi General Insurance Company Ltd, five from Bangladesh National Insurance Company, five from Prime Islami Life Insurance and five from Mercantile Insurance Company do not have a minimum of two percent share of the paid-up capital of their respective companies.
Apart from them, Asia Insurance, Bangladesh General Insurance, Karnaphuli Insurance, Eastern Insurance, Progressive Life Insurance, Meghna Life Insurance, Purabi General Insurance, Standard Insurance and Paramount Insurance Limited have also been given the letters by the BSEC.
The other companies include Fu-Wang Ceramic, Wata Chemical, United Airways (BD), Intech Ltd, Imam Button, Kay & Que (Bangladesh), Dulamia Cotton and Exim Bank Ltd.