Some 350 sponsors and directors of listed companies will not be
allowed to sit on the boards as they hold less than 2 percent shares
individually in their firms.
They failed to comply with a regulatory directive on minimum shareholding by not acquiring the required percentage of shares within May 21, according to primary data available from Dhaka Stock Exchange.
In such case of directorship vacancy, anybody with 5 percent or more stakes in a listed firm will be entitled to be a director in its next annual general meeting.
However, the Securities and Exchange Commission is yet to gather accurate information from the listed companies about the vacancy.
“The commission will send letters to all listed firms, instructing them to submit a list of vacant posts of directors to the regulator by July 15,” an SEC statement said yesterday.
The stockmarket regulator also rejected the appeals of directors seeking time extension to comply with the rule on minimum shareholding.
The High Court on June 21 upheld the SEC's special power to impose any condition on the market, rejecting five petitions that challenged the Section 2CC of Securities and Exchange Ordinance, 1969.
The Section 2CC empowers the commission to impose any conditions on listed companies in the interest of the market as well as investors. The regulator has been exercising this since 1997.
Citing the Section 2CC, an SEC circular on November 22 last year made it mandatory for sponsors and directors of listed companies to always keep the fixed percentage of shares under individual and combined ownership.
The SEC directive was meant to stop share sales by sponsors and directors and to create a buying pressure on the stockmarket for the benefit of investors, who have been suffering losses since the price debacle in January last year.
After issuance of the directive, 1,330 sponsors and directors in 231 listed companies were found holding less than 2 percent stakes in their own firms.
Of them, 980 people got the required amount of shares either purchasing from the secondary market or as gift from their close relatives.
At present, 238 companies are listed on the stock exchanges.
From a meeting yesterday, the stockmarket regulator asked the stock exchanges to collect information from the listed companies on their latest shareholding position and submit a report to it within July 15.
The SEC will also ask Bangladesh Association of Publicly Listed Companies to provide every support in gathering the list of vacant posts of directors and the latest shareholding status.
Earlier on May 21, the HC also upheld the SEC directive on minimum shareholding after rejecting petitions filed by some directors and aspirant directors of three listed firms.
The petitioners had challenged the legality of the SEC circular.
They failed to comply with a regulatory directive on minimum shareholding by not acquiring the required percentage of shares within May 21, according to primary data available from Dhaka Stock Exchange.
In such case of directorship vacancy, anybody with 5 percent or more stakes in a listed firm will be entitled to be a director in its next annual general meeting.
However, the Securities and Exchange Commission is yet to gather accurate information from the listed companies about the vacancy.
“The commission will send letters to all listed firms, instructing them to submit a list of vacant posts of directors to the regulator by July 15,” an SEC statement said yesterday.
The stockmarket regulator also rejected the appeals of directors seeking time extension to comply with the rule on minimum shareholding.
The High Court on June 21 upheld the SEC's special power to impose any condition on the market, rejecting five petitions that challenged the Section 2CC of Securities and Exchange Ordinance, 1969.
The Section 2CC empowers the commission to impose any conditions on listed companies in the interest of the market as well as investors. The regulator has been exercising this since 1997.
Citing the Section 2CC, an SEC circular on November 22 last year made it mandatory for sponsors and directors of listed companies to always keep the fixed percentage of shares under individual and combined ownership.
The SEC directive was meant to stop share sales by sponsors and directors and to create a buying pressure on the stockmarket for the benefit of investors, who have been suffering losses since the price debacle in January last year.
After issuance of the directive, 1,330 sponsors and directors in 231 listed companies were found holding less than 2 percent stakes in their own firms.
Of them, 980 people got the required amount of shares either purchasing from the secondary market or as gift from their close relatives.
At present, 238 companies are listed on the stock exchanges.
From a meeting yesterday, the stockmarket regulator asked the stock exchanges to collect information from the listed companies on their latest shareholding position and submit a report to it within July 15.
The SEC will also ask Bangladesh Association of Publicly Listed Companies to provide every support in gathering the list of vacant posts of directors and the latest shareholding status.
Earlier on May 21, the HC also upheld the SEC directive on minimum shareholding after rejecting petitions filed by some directors and aspirant directors of three listed firms.
The petitioners had challenged the legality of the SEC circular.
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