BSEC issues ultimatum to 27 non-compliant firms with 30% shareholding rules

The stock market regulator Bangladesh Securities and Exchange Commission (BSEC) has issued a further ultimatum to 27 listed companies who failed to comply with the mandatory rule on joint ownership of a minimum of 30% shares in their firms' paid-up capital. 

The commission has sent letters to the firms asking them to comply with the mandatory rule within 30 days, sources said.

Sources said many companies are trying to comply with the rules but they need time. Some of them have pending cases in court while others did not take any action regarding the compliance.

Now the commission will take necessary legal action and steps against those firms who keep failing on the rules within the stipulated period, sources added.

Market insiders said some companies had held below 30% shareholding when they listed on the stock exchanges. 

As per the securities regulator's directive, sponsors or promoters and directors must jointly hold a minimum of 30% of shares of the paid-up capital of a company all the time.

The sponsors and directors of the non-compliant companies in contrast are holding their positions violating the BSEC directive.

The regulator came up with the order in the wake of the stock market crash in 2010. The move was aimed at making the directors responsible and loyal to small investors, as it was seen that many directors sold off their shares right before the debacle.

In July last year, the new leadership of the securities regulator asked 43 listed companies to ensure that their sponsors and directors would jointly hold at least 30% of shares in their respective firms.