Home ›› 06 Nov 2021 ›› Stock
Twenty-five listed companies have failed to comply with the directive on the minimum shareholding guideline made mandatory for them around ten years ago.
Most of the companies have been plagued with irregularities or remained inoperative for years.
In line with its action plan taken last year, the securities regulator started to reform the boards of the errant companies.
On December 22, 2011, the Bangladesh Securities and Exchange Commission directed directors except the independent ones to hold at least 2 per cent individually and 30 per cent together of the total stake of their firms.
The move was taken to heal the wounds met by the stock market in late 2010-- when it experienced boom and bust. Analysts had believed many directors sold off their holdings right before the crash.
Back in 2019, the BSEC amended the directive in a way so that any director who fails to hold 2 per cent of his own company’s shares would be forced to immediately vacate his position.
Of the errant companies, the scam-hit FAS Finance directors utterly failed to comply with the directive. The BSEC already recast the boards of the company down by PK Halder and his associates who swindled Tk 1,300 crore.
It was followed by IFIC Bank, Fine Foods, and Fu-Wang Food. They were still far from meeting with the directive.
On July 29 last year, the BSEC wrote to the errant listed companies to follow the directive by November 30—the latest deadline extended several times.
“Since then, no more deadline has been given,” BSEC spokesman Rezaul Karim told The Business Post.
“For protecting the investor interest and improving their financial performance, the commission is now restructuring the boards of those companies in phases.”
As part of the BSEC’s action plan, the boards of Agni Systems, AL-Haj Textile, Familytex (BD) and C&A Textiles have already been reconstituted.
The regulator is now working to recast the boards of Generation Next, Information Services Network and Delta Spinners.
