In light of ongoing concerns over the state of Bangladesh’s capital market, stakeholders have submitted a formal request to the Bangladesh Securities and Exchange Commission (BSEC), urging reconsideration of the selection process for appointing independent directors under Clause 24 of the Demutualization Act, 2013. This comes amidst growing frustration among investors, both local and international, who believe the market has been hampered by decisions taken by the last two commissions over the past 15 years.
The letter, addressed to BSEC Chairman Khondoker Rashed Maqsood, highlights the precarious situation in the capital market due to what is described as anti-investor, nontransparent, and self-serving decisions made by previous commissions. Investors had initially hoped that the interim government and BSEC would take a more transparent and investor-friendly approach to regulating the market. Instead, recent actions have fueled concerns.
At the heart of the issue is the application of Clause 24 of the Demutualization Act, which BSEC has used to appoint seven independent directors. However, stakeholders argue that the clause could have been more appropriately applied to the formation and restructuring of the Dhaka Stock Exchange’s (DSE) Nomination and Remuneration Committee (NRC). This would ensure compliance with the Demutualization Scheme while making the process more transparent.
The stakeholders are requesting that BSEC reconsider its decision and follow a more democratic procedure. They propose that Clause 24 be used to form an NRC composed of four elected directors currently holding office. This NRC would then be responsible for providing BSEC with a list of recommended candidates for the board, from which BSEC could select those who are in the best interest of both the DSE and the broader capital market.
