Metro Spinning directors to buy shares to ensure 30% holding

Two sponsor directors of Metro Spinning Limited, a sister concern of Maksons Group, will buy shares of the company to comply with the 30% shareholding rules.

As per the DSE data, the board of directors jointly hold 26.20% shares of the company.

So, the two directors will buy 3.88% shares to meet the 30% shareholding criterion, according to the Dhaka Stock Exchange (DSE) website.

Sponsor directors, Mohammad Ali Khokon, also managing director of Metro Spinning, and Laila Ali will buy 11.66 lakh and 12.34 lakh shares of the company respectively at the prevailing market price through the DSE by October 29, 2020.

As per a directive from the Bangladesh Securities and Exchange Commission (BSEC), sponsors or promoters and directors must jointly hold a minimum 30% shares of the paid-up capital of a company at all times.

The directors decided to buy the shares after a warning issued by the BSEC chief.

At a webinar on October 6, BSEC Chairman Professor Shibli Rubayat-Ul-Islam said the board of directors of listed companies will face difficulties if they do not jointly hold 30% shares.

He also warned that no concessions would be made in this regard.

On July 29 this year, the new leadership of the securities regulator asked 44 listed companies to ensure that their sponsors and directors jointly hold at least 30% shares in their own companies within the next 60 days.

Only three companies – BD Thai Aluminum, Bangladesh General Insurance, and Emerald Oil Industries Ltd – have complied with the rules at this time.

Stock investors have alleged that many sponsors and directors are retaining controlling power at different companies even after selling off their shares.

Meanwhile, stakeholders have said that if the minimum 30% shares are held by sponsors and directors, it could help ease the ongoing liquidity crisis in the capital markets through the release of a substantial amount of funds.

The companies that have not yet formally started the process of holding a combined 30% stake by their sponsors and directors are Intech Limited, Familytex, United Airways, Fu-Wang Ceramics, Fu-Wang Food, Agni Systems, Shurwid Industries, Active Fine Chemical, Al-Haj Textile, Beximco Pharmaceuticals, FAS Finance, Generation Next, Mithun Knitting, Delta Spinning, Baraka Power, Olympic Accessories, Information Services Network, Northern Jute, Pharma Aid, Salvo Chemical, Beximco, Central Pharma, Peoples Leasing, Olympic Industries, City bank, Aftab Auto, Standard Ceramic, Tallu Spinning, Imam Button, Maksons Spinning, Apollo Steel Complex, C&A Textile, and Bay Leasing.

Of these companies, People's Leasing is in the process of liquidation.