E-voting a must in shareholder meetings

The stock market regulator has made e-voting mandatory in shareholder meetings for Z category companies in a bid to improve their overall situation and ensure good governance.

But the Bangladesh Securities and Exchange Commission (BSEC) has kept the system optional for other listed companies.

They can use the electronic voting system in their annual general meetings (AGMs) and extraordinary general meetings (EGMs) to ensure compliance and improve governance.

BSEC Chairman Professor Shibli Rubayat-Ul-Islam told The Business Standard, "We need two years to digitise all the stock market activities. We are working on several projects. E-voting is one of them."

"We have already approved the holding of the annual general meeting in online systems. Some companies are doing well and trying to come out of the Z category. We would like to help them by nursing them," he added.

Professor Shibli said, "First of all, we are forcing only Z category companies to hold shareholder meetings using the e-voting system. After that, companies from all categories will comply with the rules."

As a result, weak companies will not be able to influence AGMs to pass agendas in their favour. Thus, directors who are not fit for the posts will not be able to continue on for years.

Investors will have the right to vote to elect a good board of directors panel. Foreign portfolio investors will be able to participate in the e-voting system and give their opinion about the company.

Existing board of directors will be replaced through the e-voting system and overall general investors' rights will be established in the company, according to the BSEC. 

Commission sources said companies' overall situation will see a radical change because of the e-voting system, especially in the board of directors. The companies will hold their AGMs within six months.

Investors will be able to vote online on the agendas of the companies regarding AGMs and EGMs on the basis of a one share one vote system.

If an investor holds 100 shares of a company until the record date and votes in the AGM, then it has to count as 100 votes.

Every company will have to upload an e-voting platform with the agenda of the meeting posted on its website minimum one week before the scheduled meeting date.

The commission has been preparing an e-voting platform for such types of meetings.

It has also decided to amend the conditions for Z category companies.

The sponsors and directors holding shares of Z category companies will not be able to sell, transfer, handover and pledge them.

The companies, which have been continuing in the Z category for two years, will have to reform their existing board of directors within the next 45 working days.

If they fail to reform it, those sponsors and directors will not remain as directors of any other listed companies and capital market intermediaries.

The commission will appoint special auditors and also observers to ensure compliance and good governance.

Besides, the regulator will ensure good governance through reforming the board of directors of Z category companies.

If the reformed board of directors fails to improve the overall situation of the companies within four consecutive years, then stock exchanges will delist them, and BSEC will take other regulatory action against them.

The commission has also decided to repeal its earlier orders and notifications by issuing a new directive in this regard soon.

Meanwhile, listed company Grameenphone Ltd has held an annual general meeting using the e-voting system.

Currently 53 listed companies are trading in the Z category. Of them, a number of companies are trading year after year. They are cheating the investors by not recommending dividends.