The stock market regulator has decided to reform the boards of the listed companies that fail to hold at least 30 per cent shares of their firms collectively.
Yesterday, the Bangladesh Securities and Exchange Commission (BSEC) approved a work plan on how to restructure the boards.
If a company fails to meet the condition on the minimum shareholding within November 30, the reform will be mandatory, the regulator said in a press release.
In 2011, the regulator ordered sponsors and directors to hold a minimum of 2 per cent shares of their company individually and 30 per cent jointly.
All the directors did not follow it despite repeated orders from the commission. Until November 1, directors of 36 companies were holding less than 30 per cent shares in combined.
This compelled the new commission to cancel the directorship of 17 directors of nine listed companies for not holding the minimum shares in September.
The regulator also fixed October 27 as the deadline to fulfil the collective minimum shareholding requirement and later extended it by a month.
Yesterday, the commission approved Mudaraba perpetual bond of Social Islami Bank worth Tk 500 crore. The bond would be unsecured and contingent-convertible and will carry a floating rate.
Financial institutions, funds, corporates and eligible investors are allowed to invest in the bond.
With the proceeds from the bond, the private commercial bank will strengthen its Tier 1 capital base.
Tier 1 capital is used to describe the capital adequacy of a bank and refers to core capital that includes equity capital and disclosed reserves.
The face value of the bond is Tk 10 lakh each.
EBL Investments Ltd is the trustee of the bond, while City Bank Capital and Prime Bank Investments are the lead arrangers.
Source: The Daily Star, 26.11.2020.