17 to lose directorships for not complying with 2% shareholding rule

Bangladesh Securities and Exchange Commission (BSEC) Thursday decided to cancel directorship of 17 directors of 10 listed companies for not complying with 2% shareholding rule. 

The commission will issue a directive in this regard very soon.

Earlier on July 2, the commission sent a separate letters 61 directors of 22 listed companies in this regard.

Besides, the regulator also asked the directors to ensure holding of a minimum two percent shares in their relevant companies in 45 days to continue their directorship.

Sources said the commission has taken this decision that the directorships of those, who failed to comply with the 2 percent minimum shareholding rules within the given time, will be cancelled. 

Twenty-five directors already have complied with the rules, 19 directors have left the company board and 17 directors of 10 companies are still on the board without complying with the rule. So, BSEC is going to cancel their directorships.

On November 22, 2011, the BSEC issued a directive, which made it mandatory for each sponsor-director to hold a minimum of two percent shares of a company's paid-up capital.

The directive was amended on May 21, 2019, imposing more restrictions.

According to the rules, if any the director fails to comply with the two percent shareholding rules, his/her the 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 were insurance companies.