Dhaka bourse misses another deadline to appoint MD

The Dhaka Stock Exchange (DSE) has failed to appoint its managing director (MD) despite two extensions of the deadline.

The post fell vacant in September last year following the resignation of the managing director midway through his tenure.

At the time, the country's premier bourse failed to fill the post in the stipulated 90 days.

It later moved to the capital market regulator, which extended the time twice – once for one month until 8 January in the first phase, and three months until 8 April in the second phase – to complete the procedure.

The second extension of time by the Bangladesh Securities and Exchange Commission (BSEC) expired on 8 April, but the DSE did find a suitable person to run the exchange.

The DSE has not applied again for another extension and is awaiting a decision from the commission to this end.

A BSEC official told The Business Standard that the new board has been formed and the commission will take a decision based on its proposals.

A member of the newly formed DSE board declined to comment, terming the appointment of the MD a complicated issue.

In December, the DSE's Nomination and Remuneration Committee (NRC) interviewed eight candidates but did not recommend anyone at that time.

An NRC member told TBS that no one was found to be qualified to run the DSE among the interested candidates, due to which no one was recommended for appointment.

According to the Board and Administration Regulations, a list of at least three candidates for the appointment of MD is to be sent to the commission based on the recommendation of the NRC, from among whom the commission appoints one for a period of three years.

The DSE could not send anyone's name as there was no recommendation from the NRC after the interviews.

However, after two months, in February, the DSE sent the names of three of those who were not considered eligible by the commission.

The proposed names are DSE's current acting managing director M Saifur Rahman Majumdar, Prime Bank's former managing director Md Tabarak Hossain Bhuiyan and the incumbent managing director of BD Ventures Limited Shawkat Hossain.

As the NRC did not recommend the appointment of anyone, the DSE wrote to the BSEC in December, asking for three months' time.

DSE's acting managing director M Saifur Rahman Majumdar told TBS on Monday, "A list has been sent to the commission within the time limit; now the commission will decide."

The country's premier bourse has been run by an acting managing director since September, when the post fell vacant.

The recent past managing director Tarique Amin Bhuiyan resigned from the post following what was given out as a "conflict" with the DSE board.

He resigned in August last year, the resignation coming into effect from September.

Usually, the DSE can appoint an MD within 90 days of a vacancy due to resignation or the expiration of the term.

If the DSE fails to appoint an MD during this time, the commission can appoint the MD of the bourse if it wants to.

Why MDs can't complete their tenures 

The previous two managing directors of the DSE resigned much before the end of their terms in the last two years.

It is alleged that resignations follow conflicts with the board. Due to the dominance or control of influential people on the stock exchange, managing directors have been resigning due to their inability to carry out their assigned duties properly.

After serving for a little more than a year, the immediate past MD Tarique Amin Bhuiyan tendered his resignation due to a "conflict" with the board, effective from 8 September.

He resigned due to a dispute with the board over the promotion of DSE officials.

Kazi Sanaul Hoq, who was earlier appointed for three years, resigned after 10 months of taking charge of the office, citing personal reasons.

According to people concerned, such early resignations following "conflicts" with the board have created a negative perception about the DSE, due to which many qualified people do not show interest in taking up the job.

To reduce the influence of brokerage house owners on the DSE, the management was separated from ownership in 2014, which is known as demutualisation.

But practically, the influence of the primary shareholders or the brokerage houses remains as usual because independent directors cannot exercise much power in the management of the DSE.

The board of the DSE has 13 members, including seven independent directors, who are appointed by the capital market regulator.

And five representatives of brokerage house owners are elected as directors on the board. The managing director also becomes a member of the board in an ex-officio capacity.

Seeking anonymity, a member of the newly-formed board said they are working on appointing the managing director as soon as possible.

After the MD's post fell vacant, the DSE issued a circular on 6 October, inviting applications from eligible candidates.

A total of 18 candidates have applied for the post so far, and eight of them were interviewed by the NRC.