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Sponsor-directors' selling shares sans declaration

Stakeholders decide to give list to BSEC

FE Report | Published: May 23, 2019 12:20:49 | Updated: May 24, 2019 10:52:12


The capital market stakeholders will urge the securities regulator to take necessary measures against the sponsor-directors of the listed companies, who sold their shares without declaration and by evading tax.

The decision of identifying such sponsor-directors was taken at a meeting, held at the Dhaka Stock Exchange (DSE) office on Wednesday.

The representatives of the DSE, the Chittagong Stock Exchange (CSE), the DSE Brokers Association (DBA), and the Bangladesh Merchant Bankers Association (BMBA) were present in the meeting.

To implement the decision, the premier bourse authority has been given the responsibility of preparing the list of sponsor-directors, who sold shares without declarations.

"The decision of preparing the list of such sponsor-directors was taken unanimously. We will submit the list to the Bangladesh Securities and Exchange Commission (BSEC), seeking its necessary measures," said Rakibur Rahman, a director of the DSE.

He said the list of the sponsor-directors, who earlier sold shares without declaration, will also be sent to the National Board of Revenue (NBR), as they evaded tax.

The sponsor-directors are subject to payment of 5.0 per cent tax on sales of their shares, following giving the declaration of selling shares within 30 days.

Meanwhile, the Central Depository Bangladesh Limited (CDBL) has introduced 'Block Module' to enforce mandatory declaration by the sponsor-directors for selling their shares.

Rakibur Rahman, also a former president of the DSE, said a 12-member body has also been formed to facilitate the reform initiatives, taken by the securities regulator.

The BSEC has formulated the draft amendment to the public issue rules. Before giving final approval, the regulator will seek public opinion in this regard soon.

"We have decided to give uniform opinion from the bourses, the DBA and BMBA on the draft amendment to the public issue rules," Rakibur Rahman added.

Minhaz Mannan Emon, a director of the DSE, said the 12-member body, comprising the representatives of the DSE, the CSE, the DBA and the BMBA, has been formed to play a positive role for the sake of the capital market.

"The output of the recent market supportive measures is yet to be visible. That's why we have scopes to work together for development of the market."

He also said they will propose the central bank to check joint shareholding status of the sponsor-directors of a listed company in case of giving loans.

As per the existing rules, the sponsor-directors of a listed company are required to hold 30 per cent shares jointly.

Md. Shakil Rizvi, the BDA president, Shaifur Rahman Mazumdar, the CSE managing director, and Mohammed Nasir Uddin Chowdhury, the BMBA president, among others, were present in the Wednesday's meeting.

mufazzal.fe@gmail.com

 

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