27 firms yet to comply with 30% shareholding rules

Twenty-seven listed companies have not complied with the stock market regulator's rule requiring the companies' sponsors and directors to have a 30% stake in them.

Of them, 15 did not take any action to follow the rules of the Bangladesh Securities and Exchange Commission (BSEC).

Also, two companies have sought time to comply with the rules and one could not comply as it had a case pending in court.

The rest are trying to comply.

Sixteen companies out of 43 complied with the rule till 30 November.

Recently, the stock market regulator finalised a proposed action plan to restructure the boards of companies where sponsors and directors failed to jointly hold a 30% stake by 30 November.

A BSEC official said the commission wanted to restructure the companies' boards through e-voting systems conducted by the Central Depository of Bangladesh.

He said a shareholder holding 2% of shares would be eligible to be a candidate in e-voting if he was interested in joining the board.

The commission also wants to appoint independent directors in those companies' boards. As a result, nobody will be able to hold a directorship illegally or forcefully.

The BSEC official said investors would elect directors from the interested shareholders during the annual general meeting.

As per the securities regulator's directive, sponsors or promoters and directors must jointly hold a minimum of 30% of shares of the paid-up capital of a company all the time.

Mohammad Rezaul Karim, BSEC executive director and spokesperson, said the securities regulator had given a deadline to those companies' sponsors and directors who had failed to comply with the 30% shareholding rules.

If a company fails to comply with the rules within the deadline, the regulator will restructure its board, he added.

Stock market expert Professor Abu Ahmed said restructuring non-compliant companies' boards would reveal their real picture to shareholders.

"Also, such a step may lessen the deprivation of investors that they are facing now. The new boards would have to overcome challenges to move the companies' businesses forward within three years. If they cannot make a positive change, the companies should be subjected to liquidation," he added.  

The sponsors and directors of the companies in question are holding their positions in violation of a 2011 BSEC directive.

The regulator came up with the order in the wake of the stock market crash in 2010. The move was aimed at making the directors responsible and loyal to small investors, as it was seen that many directors sold off their shares right before the debacle.

On 29 July this year, the new leadership of the securities regulator asked 43 listed companies to ensure that their sponsors and directors would jointly hold at least 30% of shares in their own companies within the next 60 days.