Foto

Please Share If You Like This News

Buffer Digg Facebook Google LinkedIn Pinterest Print Reddit StumbleUpon Tumblr Twitter VK Yummly

The listed companies are showing their unwillingness to block their directors’ shares using a Central Depository Bangladesh module as per a directive market regulator Bangladesh Securities and Exchange Commission issued recently to prevent secret share-sales by directors.


Hostens.com - A home for your website

There are around 3,000 directors in the companies listed with the capital market. Of them, only around 300 directors have their shares blocked by the CDBL module so far.
On May 15, the BSEC issued a directive saying that all listed companies block securities of the respective company held in the beneficiary owners’ account of the sponsor shareholders, directors and placement holders using the block module of CDBL. The directive was issued with an immediate effect.
But, the listed companies failed to follow the commission’s directive.
CDBL managing director Shuvra Kanti Choudhury told New Age that the companies were blocking shares of their sponsor-directors and placement holders.
He said that there was no time limit given by the commission. If the companies continuously fail to obey the rules, the commission will decide what measures it can take about the companies.
Some of the companies have taken a ’wait-and-see’ approach in this connection, CDBL officials said.
They said some were undecided while some others were confused about the directive.
CDBL has recently trained the officials of the listed companies on how they can block shares of the sponsor-directors and placement shareholders.
CDBL also pushed the companies to block shares of their directors immediately, but all companies were not responding.
If the placement shareholders have already sold a portion of shares, the rest must be blocked using the CDBL system.
According to the BSEC directive, upon receiving declaration and requisite government tax from the sponsor-directors and placement shareholders for trading their securities, the stock exchange would allow the share trading disposing of the securities from the BO account concerned through the block module of CDBL.
BSEC officials said that the commission might take action against the companies if they delayed obeying the directive of the commission.
The commission has tightened the screws on the directors as the capital market stakeholders raised the concern that the sponsor-directors were selling their shares secretly and without providing taxes on the proceeds.
The sponsors/directors were often found selling shares without any declaration to public, and without prior regulatory approval. The directors will not be allowed to sell shares if they fall short of 2 per cent individually and 30 per cent jointly shareholding.
Share sales by the sponsor-directors stir up trouble at the market as investors lost confidence in the companies’ business performance, market experts said.
They said the companies’ directors with the connivance of the companies’ management sold shares through their own brokerage houses.
Under the circumstances, the bourses proposed flagging the directors’ shares so that their shares would automatically be blocked by CDBL and cannot be released without the bourses’ intervention.
CDBL developed the system and then the commission issued the directive saying that it must be used immediately.

bottom