Stocks
DSE Shareholders Question BSEC’s Appointment of Independent Directors Amid Compliance Concerns
Shareholders of the Dhaka Stock Exchange (DSE) have raised concerns regarding the recent appointment of two independent directors by the Bangladesh Securities and Exchange Commission (BSEC), suggesting that the appointments may not adhere to the established regulatory framework.
The controversy emerged after the BSEC appointed seven independent directors to the DSE board on 2 September, allegedly bypassing candidates proposed by the shareholders. The appointments of KAM Majedur Rahman, a former managing director of the DSE, and Nahid Hossain, an additional secretary in the financial institutions division of the Ministry of Finance, have been particularly questioned.
A group of shareholders cited the Dhaka Stock Exchange (Board and Administration) Regulations 2013, which stipulate that an individual cannot serve as an independent director if they have had a business relationship with the stock exchange—whether directly or indirectly—as a partner, substantial shareholder, or director of an entity with such a relationship within the past three years. Additionally, the regulations disqualify anyone associated with TREC holders, shareholders of the stock exchange, or its directors, or anyone who has been an employee of a regulatory body.
The shareholders highlighted that KAM Majedur Rahman served as a director at AK Khan Securities from December 2020 to 4 October 2022 and is currently the CEO of AK Khan and Company Ltd, the parent company of AK Khan Securities. They also pointed out that Nahid Hossain’s role as an additional secretary in the financial institutions division, a government entity with regulatory functions, should disqualify him from being considered an independent director.
In response, the BSEC clarified that Majedur Rahman was a nominated director at AK Khan Securities, which exempts him from the restrictions outlined in the regulations. The commission also argued that the financial institutions division does not function as a regulatory body, thus preserving Nahid Hossain’s eligibility for the position.
BSEC Director and spokesperson Farhana Faruqui emphasized to the media that the appointments were made in accordance with existing rules and regulations, asserting that there is no conflict of interest in these cases.
The BSEC further explained in a statement that it typically approves the list of independent directors recommended by the DSE’s Nomination and Remuneration Committee (NRC). However, the NRC is currently non-operational due to the resignation of all its independent directors, necessitating the BSEC’s direct involvement in the appointments.
Saiful Islam, president of the DSE Brokers Association (DBA), commented on the situation, stating, “We are not legal experts, so we cannot provide a legal interpretation. However, if there are allegations of a legal dispute regarding someone’s appointment, the BSEC must provide a legal explanation on the matter. If that’s not possible, then an alternative measure must be taken to maintain market confidence.”
He added, “To uphold market confidence, we want to remain above any controversy. No party should take any steps that could undermine trust.”
In a letter to the finance adviser on Sunday, the DBA called for reforms in the Stock Exchange Demutualization Scheme, which was enacted a decade ago. DSE shareholders believe they should have an equal voice on the bourse’s board.
The demutualized DSE board comprises 13 seats: four for shareholder directors, one for the strategic investor, one for the managing director, and seven for independent directors, who are typically recommended by the DSE NRC and approved by the BSEC.
One of the Listed companies, National Polymer Limited has recommended 10.50% Cash Dividend for the year ended June 30, 2024.
It has reported Consolidated EPS of Tk 2.27 paisa, and Consolidated NAV per share of Tk 30.63 for the year ended March 31, 2024.
The Annual General Meeting (AGM) of the company will be held on December 18, through the digital platform. The record date for this has been fixed at October 22.
The Company also discloses its financial reports for the second quarter, (April – June 24).
As per the company’s consolidated life revenue account for April to June 2024, the excess of total income over total expenses, including claims (surplus), stood at Tk 1,394.24 million. This marks a significant increase from the surplus of Tk 823.68 million during the same period in 2023.
For the first half of 2024, from January to June, the company reported a surplus of Tk 2,177.57 million, compared to Tk 1,290.39 million in the corresponding period of the previous year.
Additionally, the Life Insurance Fund balance as of June 30, 2024, reached Tk 55,188.62 million, showing a net increase of Tk 5,892.25 million from Tk 49,296.37 million on June 30, 2023.
One of the Listed companies, Beacon Pharmaceuticals PLC has recommended 20% Cash dividend and 10% Cash Dividend to Sponsor Shareholder and Directors for the year ended June 30, 2024.
It has reported EPS of Tk 2.26 paisa, and NAV per share of Tk. 26.37 for the year ended June 30, 2024.
The Annual General Meeting (AGM) of the company will be held on December 23, through the digital platform. The record date for this has been fixed at October 27.
The Bangladesh Securities and Exchange Commission (BSEC) has removed three audit firms from its panel for their failure to secure enlistment with the Financial Reporting Council (FRC), according to a notice issued today.
The firms—A Hoque & Company, FAMES & R, and SK Barua & Company Chartered Accountants—were delisted following the FRC’s request. In December last year, the FRC published a list of enlisted audit firms and subsequently, in February, requested the BSEC to remove any firms that were not included on that list.
BSEC regulations mandate that financial statements signed by auditors outside its approved panel will not be accepted. With the removal of these three firms, the total number of audit firms on the BSEC panel has been reduced from 48 to 45.
Sources from the FRC revealed that 15-20 audit firms failed to secure enlistment last year, and approximately 45 chartered accountants are currently under restrictions imposed by the Institute of Chartered Accountants.
Although the delisted firms can no longer audit issuer companies or listed securities, they are allowed to complete audit and assurance services that were initiated before their removal, the BSEC clarified.
