BSEC dissolves 6th errant listed company’s board

The Bangladesh Securities and Exchange Commission (BSEC) yesterday dissolved the board of Emerald Oil and formed a new one in a bid to improve its performance.

The listed edible oil producer is the sixth company whose boards were created anew as per a decision taken by the regulator earlier.

The previous five companies were C&A Textiles, Ring Shine Textiles, United Airways, Familytex (BD) and Alhaj Textile Mills.

The BSEC last year decided to bring about the change if any company remained in losses for at least two years, or if company sponsors fail to hold at least 30 per cent of shares jointly.

Emerald Oil's stocks were being traded as junk since 2017 due to the incurring of losses and announcement of no dividend, showed Dhaka Stock Exchange (DSE) data.

The company was transferred to the "Z" category in January 2018.

Its board of directors did not initiate any action and, therefore, failed to improve its performance during the last four years, the BSEC said in letters sent to the directors.

Emerald Oil also failed to declare any cash dividend and hold annual general meetings within the stipulated time, while it appears that the company is not appropriately growing, read the letter.

"This is detrimental to the interest of the investors and undesirable to the commission," said the BSEC, explaining the appointment of five new directors.

They are former senior secretary Mohammad Shahidul Haque, Prashanta Kumar Banarjee from the Bangladesh Institute of Bank Management, University of Dhaka associate professor Santus Kumar Deb, and assistant professors Mohammad Golam Sarwar and Sajib Hossain.

Haque was made the board's chairman.

The former directors shall not be allowed to represent and be elected as directors, and the shares they hold shall not be free for offloading until further notice, said the letter.

The BSEC appointed directors to the other five companies for almost the same reasons.

C&A Textiles has been incurring losses since 2017 and its sponsors jointly hold less than 30 per cent stake in the company.

Flight activities of United Airways has been suspended for the past five years. Its sponsors jointly hold less than 5 per cent of shares.

Familytex (BD) has been incurring losses for around five years, and its sponsors hold less than 5 per cent shares jointly as well.

The BSEC restructured the board of Alhaj Textile Mills as its sponsors were together holding 12.78 per cent of shares.

The stock market regulator appointed the directors who are reputed in the sector for their efficiency, so investors are hoping for the companies to make a turnaround, said a stock broker.

"This is a good step for the betterment of the stock market," he said, adding that even if a few make a comeback, it would be great news.