Sponsors, directors barred from selling shares if they fail to hold 30pc stakes

FE Report | Published: May 22, 2019 10:45:54 | Updated: May 23, 2019 10:38:43

Listed companies will be allowed to raise capital issuing bonus shares only for the purpose of BMRE and further qualitative development.

The Bangladesh Securities and Exchange Commission (BSEC) took the decision on Tuesday.

The securities regulator also took the decision of issuing a new notification regarding holding minimum amount of shares by the sponsor-directors of the listed companies in the meeting.

According to BSEC decision, the listed companies will be allowed to declare stock dividend only for important purposes such as BMRE (Balancing, Modernisation, Rehabilitation and Expansion) and further qualitative development.

While publishing the price sensitive information (PSI) regarding bonus declaration, the listed companies will have to mention the reason of issuing such kind of shares and the sector in which the fund will be utilised.

"The securities regulator will issue a notification regarding bonus share declaration soon," the securities regulator said.

According to another decision, the sponsors and directors, other than independent ones, of the listed companies will not be allowed to sell or transfer or keep mortgage their shares if they fail to hold 30 per cent shares jointly.

But, confiscation of the shares will be allowed if the shareholder is a loan defaulter. "The share transmission will also be allowed after the death of a shareholder."

The listed companies will not be allowed to raise capital through issuing rights shares or bonus shares or RPO (repeat public offer) or merger if the sponsor-directors fail to hold 30 per cent shares jointly.

The casual vacancy of a director created for not holding 2.0 per cent shares individually will be fulfilled by another shareholder having 2.0 per cent shares.

"The vacancy will have to be fulfilled within 30 days," according to the BSEC decision.

Besides, both the stock exchanges will introduce a separate category for the companies whose sponsor-directors will fail to hold 30 per cent shares jointly.

The new notification regarding holding minimum shares by the sponsor-directors will be published soon.

Earlier, the securities regulator issued a notification regarding minimum shareholding status for sponsor-directors on November 22, 2011.

The BSEC recently has taken a decision to strictly enforce the previous notification including some new provisions.

At Tuesday's meeting, the securities regulator took the decision of taking measure to cancel or suspend the license of Alliance Securities & Management as it breached the securities.

"The decision has been taken for the sake of investors and to enforce discipline," the BSEC said.

According to findings of a BSEC committee, Alliance Securities and Management withdrew Tk 129.70 million from the consolidated customers account.

As a dealer, the company opened FRD account and adjusted the loans of the directors with the fund withdrawn from the customers account.


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