BSEC to get power to dissolve board without hearing

The finance ministry has drafted rules empowering the Bangladesh Securities and Exchange Commission (BSEC) to dissolve the board of listed companies without any hearing if they fail to submit financial reports or follow corporate governance. 

The Financial Institutions Division published the draft of the Bangladesh Securities and Exchange Commission Act, 2022 on March 5 and sought feedback from stakeholders.

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If the listed issuers fail to submit the annual reports or any other reports or break rules, the commission can restructure the board, the draft act said.

In the case of board restructuring, the commission would consult with the primary regulator of listed companies. The commission can't restructure the board without holding a logical hearing.

In special cases, the commission can recast the board without holding any hearing considering the interest of the securities market and general investors, said the draft.

A number of directors of the listed companies have opposed the provision that allows the restructuring of a board without holding any hearing.

The commission should allow the existing board to offer their explanation or give statements and then the decision may be taken, they said.

In order to strengthen and modernise the legal structure of the BSEC, the government has published the draft act, updating the Bangladesh Securities and Exchange Commission Act, 1993 and the Securities and Exchange Ordinance, 1969.

The draft act also proposed some new issues that were not included in the previous act and the ordinance.

To reach the goals under the proposed act, the government would form one or more special tribunals. If anyone breaks rules and regulations, trials would be carried out at the tribunal.

The BSEC will be able to form an advisory committee comprising people who have depth knowledge of securities and laws.

If anyone manipulates stocks and the commission files cases with courts, he or she may face imprisonment for up to 10 years, a fine of at least Tk 10 lakh, or both.

Funds earned through manipulation or any other illegal ways will be forfeited and compensated among the victims. The compensation should at least double the loss, it added.

The proposed act has empowered the commission to carry out intelligence activities to get advance information on stock manipulation. On top of that, suspects can be monitored.