High Court again asks SEC to explain shareholding notice

Tuesday, May 08, 2012 Unknown
The High Court yesterday again asked the stockmarket regulator to explain within two weeks why a directive for directors to hold individually at least 2 percent stakes in companies should not be declared illegal.
The HC rule came after a writ petition was filed by Abul Bashar, a director of Popular Life Insurance Company.
Earlier, the Securities and Exchange Commission had made it compulsory for sponsors, directors and promoters of listed companies to hold at least 2 percent stakes individually in their own companies.
Along with the SEC, the court also directed a share investors' association to explain as to why the directive will not be declared illegal.
A bench of Justice Farid Ahmed and Justice Sheikh Hassan Arif issued the rule after hearing the petition.
After the hearing, Attorney General Mahbubey Alam told journalists that although the petitioner sought a stay order on the SEC directive, the court issued a rule.
So, the regulatory directive on shareholding, issued by the SEC on November 22 last year, will remain effective, as no stay order came from the court.
Earlier on April 8, the HC asked regulators to explain why the SEC directive on minimum shareholding should not be declared illegal, after a writ petition filed by Sheikh Abdul Momen, husband of the late Masuda Begum, a sponsor of NCC Bank Ltd.
At that time, the court had directed the finance secretary, commerce secretary, Bangladesh Bank governor, managing director of NCC Bank, registrar of Joint Stock Companies and Firms, and Dhaka and Chittagong bourses to explain within four weeks why the directive will not be declared illegal.
According to the SEC directive, those who will fail to hold minimum 2 percent stakes in their own firms by May 22 will have to leave their sponsorship or directorship.
The commission also made it mandatory for sponsors, directors and promoters of a listed firm to jointly hold a 30 percent stake in the firm.
The SEC set a six-month deadline that ends May 22 for the sponsors, directors and promoters, who are now jointly holding less than 30 percent and individually 2 percent shares, to acquire the rest of the amount.

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