HC stays UCB's 42nd AGM

The High Court (HC) has stayed the 42nd annual general meeting (AGM) of United Commercial Bank (UCB), scheduled on July 31.

The bench of Justice Khizir Ahmed Choudhury passed the order on Sunday after hearing a petition, filed by six shareholders of the bank.

Barrister A M Mahbub Uddin Khokon and Barrister Sayed Mahsib Hossain represented the petitioners in the hearing.

According to the petition, United Commercial Bank in its 513th board meeting held on May 29 this year decided to increase the authorised capital of the bank from Tk 25 billion to Tk 50 billion, subject to approval of the shareholders in the 42nd AGM.

The board also recommended increasing the bank's core capital through the issuance of rights shares and approved the issuance of fresh shares to a strategic investor.

Barrister Mahsib said, "The issuance of new shares will further weaken the already fragile company. Although the board has decided to issue 50 per cent of the shares to a strategic investor, the definition of 'strategic investor' remains unclear.

Moreover, questions have been raised about the jurisdiction of the current board, which was formed as an interim body following the fall of the Awami League-led government on August 5 last year, to hold an AGM and make key decisions."

"The interim board of directors having mala fide intention is acting in derogation of the shareholders' rights and the applicable laws to boost their personal interests. Such a conflict of interest of the existing board members makes it impractical for them to carry out day-to-day functions for the interest of the bank," said the petition.