BSEC orders to cancel directorship of 17 directors of 9 listed firms

The Bangladesh Securities and Exchange Commission (BSEC) has issued an order to cancel the directorship of 17 directors of nine listed companies for not complying with the minimum 2% shareholding condition.

Issued on Sunday, the order was signed by BSEC Chairman Professor Shibli Rubayat Ul Islam. It was sent to the companies concerned, and they were asked to comply with it.

The order asked the boards of directors of the companies to fill up the vacancies by any shareholder having 2% or more shares of the paid-up capital within the next 30 working days.

According to the BSEC, 12 directors of six insurance companies lost their directorship. They are Sohail Humayun of Bangladesh General Insurance Company Limited; Pioneer Dresses Limited as a corporate director of Eastern Insurance Company Limited; Sharmin Nasir and Dilruba Sharmin of Meghna Life Insurance Company; Shafiq Ahmed, Azad Mostafa, Aziz Mohammad Ershad Ullah, Farhana Islam Sonia, and Saad Qadir bin Solaiman of Mercantile Insurance Company; Habib E Alam Chowdhury and Badlur Rahman Khan of Provati Insurance Company; and Mohammad Iqbal of Purabi General Insurance. 

The BSEC also cancelled the directorship of Md Lokman Chowdhury of Imam Button Industries; Shahinur Alam of United Air; and ATM Habibul Alam, Sadika Mahbub, and Anisuzzaman of Intech Limited. 

Currently, Imam Button and United Air are not in operation. 

Earlier, on July 2 this year, the commission sent separate letters to 61 directors of 22 listed companies regarding their directorship cancellation.

It also asked the directors to ensure they held a minimum 2% share in their respective companies within 45 days in order to continue their directorship. 

Among the 61, 25 complied with the rule, 19 left their company boards, and 17 are maintaining their directorship in breach of the rule. 

On November 22, 2011, the BSEC issued a directive which stated that it was mandatory for each sponsor director to hold a minimum 2% share of their company's paid-up capital.

The directive was then amended on May 21, 2019, to impose more restrictions.

According to the rules, if any director fails to comply with the 2% shareholding obligation, their position will automatically be vacated.

Despite repeated warnings from the regulator, many directors have held their positions without complying with the rule.